Establish a feedback loop to inform your employee benefits program.

Make sure to prioritize employee input to inform your program design. The key to understanding what employees' preferences are is to gather their input on the types of benefits they'd like to receive. Companies should establish a feedback loop so that they can use employee input to inform the benefits program present and future. They should make adjustments based on the feedback they receive to ensure employees are getting the most from the program.

Feedback is critical to ensuring that companies set up spending accounts that work for their workforce because different spending accounts provide different benefits. For example, a health and wellness account will have a different focus than an account for working from home or commuting. Some types of accounts, such as wellness, are universal. Others, such as child care or elder care, are more specific to certain workers.

It's important to keep feedback ongoing to inform the program design as needs evolve.

Determine how you will finance your program.

A robust funding strategy strikes the perfect balance between company and employee needs. Organizations must determine exactly how much funding to allocate per employee, and how those expenses work within the company's current budget. For instance, you may simply divide the number of employees by the allocated budget. Companies may anticipate paying an additional $12,000 in benefits for team members earning a $50,000 yearly income, for example, based on national averages.

HR executives should take into account how much of this expenditure may be put toward flexible benefits accounts. Determining funding implementation, which takes into account elements like cadence, roll-over availability, and resetting the allocated spend, is equally crucial.

Unlocking the budget for benefits spending accounts can be challenging, but funding doesn't have to be a barrier. Work with your accounting or finance department to plan out the estimated expenses and feasibility for the benefits program. Discuss opportunities to reallocate funds. For example, as workplace models shift, look to repurpose funds allocated to real estate or in-office work. It's worth noting that real estate and office expenditures historically have accounted for a sizable share of operational costs.

Select benefits accounts that offer flexibility and choice.

Three types of spending accounts offered by employers are lifestyle spending accounts (LSAs), health spending accounts (HSAs), and flexible spending accounts (FSAs). Below is a breakdown of the three options.

LSAs are post-tax accounts set up by an employer that can be used for a variety of employee expenses such as child care, mindfulness and wellness programs, transportation, or even home office equipment. Employers set the parameters for how employees can spend LSA funds, from what the offerings entail to how much funding is allocated to how often the funds are available to employees. Employees then use funds and select benefits best suited for their individualized lifestyles.

An HSA enables employees to set aside pre-tax money for current and future medical costs for themselves and their families, even if they aren't covered by their primary health plan. However, workers may only open an HSA if they are enrolled in an HSA-eligible high-deductible health plan. Funds can cover costs of copays, deductibles, doctor office visits, dental exams, vision exams, and more.

A health care FSA allows employees to set aside pre-tax dollars for eligible medical, dental, and vision expenses for you and your dependents, even if they are not covered under your primary health plan. Employees choose an annual election amount up to the IRS limit. The account is pre-funded and the full contribution is immediately available for use at the beginning of the plan year. It's important that if an employee is enrolled in an HSA, the FSA becomes limited, covering the cost of eligible dental and vision-related expenses.

The secret is to provide benefit plans that offer employees the flexibility of choice and best suit their needs. Make sure your program design includes all the categories you wish to fund with specific budgets and parameters for each one.

Develop a holistic communications strategy to drive engagement.

Like the benefits program itself, a successful communication strategy meets employees where they are. It's important to make the messaging impossible to miss. In addition to emails and announcements, companies should host a webinar demo with a question and answer session. They should record the session and post it on company platforms so employees can reference it at any time. Once the program is live, companies should send announcements when funds are loaded and reminders at the end of the month to use funds.

Communication methods and tools are endless, from email to Slack messages to web portals, landing pages, flipbooks, in person events, and video demos. The key is to find what communication style works best for your workforce and focus on fostering engagement over time.

No matter which communication method you choose, managers should share details on the benefits program to their direct reports and encourage utilization. Once benefits spending accounts are set up, encourage employees to provide feedback on the program so it's not a one and done engagement ask upfront. It should be treated holistically and feedback should be collected on an ongoing basis. Don't forget about the feedback loop!

Monitor utilization and iterate as needed.

There's no point in creating a program that's not used. If a program is or isn't performing, find out why. It's important to have good tech and metrics in place for tracking and monitoring usage. Companies should track several factors over time, such as budget usage, employee satisfaction, categories and location.

Budget utilization requires carefully tracking how much of the allocated funds for the various benefits expenditure accounts are used by your employees. A program that uses more of its funds will be more successful. Utilize both broad metrics like their overall experience and more specific metrics like how simple it is for them to get their advantages to track employee satisfaction. Tracking localization metrics focused on regional factors for different offices or branches can help you better respond to specific needs and ensure that the program maintains equity across various locations.

Listen: Helping Employers Build Better–and More Personalized–Benefits

If you find the program is not performing as expected, there are steps you can take to course correct. Consider expanding eligibility categories, shifting funds from one account and opening another, or giving employees flexibility for rollovers so benefits funds carry over.

Build a sustainable flexible benefits system that supports employees long-term.

Providing employees flexibility and choice with their benefits program will be essential to navigating today's challenges. By offering flexible benefits spending accounts, companies can provide the flexibility that workers need and desire. The result will be a contemporary and relevant benefits package that will support employees and show them how much they are appreciated while also boosting the company's competitive edge. Companies may better support employees with life benefits that assist during pivotal times in their lives by using these steps to develop benefits spending accounts.