- Key insight: Discover how legacy health plans are failing to meet modern employee wellness expectations.
- What's at stake: Employers competing for Gen Z and millennial talent without offering customizable wellness benefits.
- Expert quote: "What's the ROI here? Are my employees engaging with this?" — Alison Kosup, UHC
Source: Bullets generated by AI with editorial review
United Health Care recently introduced a lifestyle spending account (LSA) for employers to offer flexibility to workers in an expanding market of health, wellness and lifestyle benefits, and to keep pace with companies
With this post-tax benefit, participating employers can offer eligible health, wellness and lifestyle products and services not typically covered under health savings accounts and flexible spending accounts, but often coveted by employees,
A vast majority of employees — 88% — say well-being support is as important to them as their salary, according to corporate wellness platform WellHub's 2025 State of Work-Life Wellness Report. To meet those evolving priorities, it's projected that within the next three years, 76% of employers will offer an LSA or a similar product, according to a recent survey by global advisory and insurance brokerage company WTW.
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"We saw a gap evolving in the market where legacy plan designs and health benefit offerings cover a robust set of needs of members and employees, but the wellness scope is continuing to broaden and expand legacy employer wellness offerings," explained Alison Kosup, chief product officer for UHC's commercial business. "[Benefits like] smoking cessation programs and gym reimbursement programs have continued to evolve, and employees and members really expect pretty robust support in this area. And legacy plan designs can't totally fill that gap. So lifestyle savings accounts are a great way to offer employers the capability to fund that for their employees outside of what is governed under the IRS, or fully insured and [administrative services only] plan design constructs. It's a nice way to expand the offerings for employees and give employers a cost-advantageous way to do so."
UHC's employer-sponsored LSAs are currently available for January 2027 effective dates while the health insurance company's integrated UHC Store is already available for UHC's 18 million employer and individual members. The store is an online hub that currently hosts 30 vendors providing products across categories like mindfulness, women's health, nutrition, fitness, sleep, chronic conditions, family planning, and weight management.
Both the LSA and store offer a level of personalization Kosup predicts employers will increasingly seek to offer in their efforts to
"Lifestyle savings accounts, coupled with our UHC store offering, really support employers in providing personalization to their workforce," she said. "And we just see that continuing to expand as the demographics of the workforce really are changing and their desire for customization and personalization continues to change."
The power of choice
Rachel Kohn, senior vice president of people operations at corporate gifting platform Sendoso, observes this level of personalization with the company's LSA, along with a peek into the latest consumer wellness trends.
Sendoso has a Slack channel where employees are encouraged to share what they used their LSAs for — "apparently this was the year everyone got an Oura ring" — and Kohn identified Wi-Fi as the service most used through the LSA, which was introduced in the fall of 2024 through LSA platform Compt.
"I would say the No. 1 thing that people pay for is their internet, truly, which is just making sure that they have an effective work-from-home setup," she said. "I think the second largest that we see is wellness, and in terms of whether that's a membership at a gym, whether it's like classes for yoga, people pay for Class Pass, different things like that."
Regardless of specific product selection, Sendoso's LSA is the company's most popular benefit, according to Kohn.
"Compt is our most heavily utilized benefit that we have at Sendoso — we see about 90 to 98% utilization," she shared. "It is mind-boggling to me how well-utilized it is. And I think now at this point, folks don't even see it as a benefit. It's just like something that they have, and the fact that their internet is paid for every month, and they get that as a nontaxable benefit."
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Sendoso's 250 employees are over 80% millennial or Gen Z, said Kohn, aligning with the trends of these younger demographics requiring new categories of wellness support.
UHC was well-attuned to that in introducing this new benefit, according to Kosup who, like Kohn, is witnessing wearable technology as a trending wellness product, along with mental health support through apps like Headspace and Calm.
"As those types of services become more widely utilized, [the UHC] store and a discount program [will] be able to offer them [products], where we know they have real, quality of life impact for employers — significant," she shared.
Kosup predicts LSAs will become more prevalent as "most of the research you see out there said employers are considering it, they are looking into it. Early indications are that we think we're very much on the right track, and I'm curious to see how it evolves as employees — they're going to speak with their feet and their dollars. And we're already seeing engagement in the store."
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Kohn also believes employers are more widely eyeing this emerging offering, and if they aren't, she would advise them to start.
"I would recommend it wholeheartedly," she said. I think it is probably the best benefit that we have added. Period… I think it's a really great way to create more inclusivity and equity for your teams. [Whether] I am seeing more of it — I still don't think it's caught on in the same way where folks think of an HSA and a flex spending account and they think of HRAs… but LSAs are so flexible and can be used for so many other things. I would love to see more education on it and see folks adopt it at greater levels. I think choices are really the benefits of the future for a lot of folks."
UHC expects its LSA offering and integrated store to help in this adoption, especially with employers able to front-load the accounts, unlike legacy reimbursement accounts requiring a submitted claim, so transactions happen directly on the UHC site for a more streamlined consumer experience. And while LSAs are another cost for employers to add to their current benefits portfolio, Kosup would encourage companies to identify what their employees need most when deciding whether to diversify.
"Many employers offer robust programs across their entire workforce," she said. "I think employers are going to continue to look at that critically, and we're seeing it ourselves. What's the ROI here? Are my employees engaging with this? Is this what they need? And, in today's world, costs are high, expenses are at a premium, and people are thinking hard about what they offer. You need to ensure that what you offer matters to your employees."
