In today’s job market, employers are always looking for new ways to attract and retain top talent. One strategy is to offer a range of benefits that can help employees manage their finances and improve their overall quality of life. Two popular benefits in this area are medZERO and a lifestyle spending account (LSA). In this article, we’ll explore the advantages of each benefit and explain why medZERO may be a better choice for employers looking to support their employees’ healthcare needs.
What is medZERO?
MedZERO is a healthcare benefit that provides employees with on-demand access to funds to pay for their out-of-pocket healthcare expenses over time, at zero interest and zero fees. MedZERO generally costs a few dollars per month, per employee, making it a relatively low-cost way for employers to provide a valuable benefit that helps employees manage their healthcare expenses. However, it is important to note that employers typically do not fund medZERO accounts; instead, employees repay the funds they use over time. Generally, employees have access to $1500 to $5000 in medZERO spending ability. Employees repay those funds, over time using payroll deduction. For employees with Health Savings Accounts, those payments are pre-tax (creating an additional savings of up to 30%.)
Advantages of medZERO:
– Helps employees manage their healthcare expenses: One of the biggest advantages of medZERO is that it provides employees with an affordable and convenient way to pay for their out-of-pocket healthcare expenses over time. This can be especially beneficial for employees who may be struggling to afford necessary medical care or who have unexpected healthcare expenses. 68% of employees report facing cost struggles getting the care they need.
– Long-term benefits: MedZERO is an ongoing benefit that helps employees manage their healthcare expenses over time, which can lead to better overall health outcomes and reduced financial stress for employees. By providing a benefit that helps employees stay healthy and financially stable, employers may be able to improve retention and attract new talent.
– More targeted benefit: MedZERO is specifically designed to help employees manage healthcare expenses, which means that it is a more targeted benefit that directly addresses a common pain point for employees.
– Supports diversity, equity, and inclusion: Healthcare expenses can be a significant burden for many employees, particularly those from underrepresented or marginalized communities who may face additional financial challenges. By offering a benefit like medZERO, which helps all employees manage their healthcare expenses regardless of their financial situation, employers can support diversity, equity, and inclusion in the workplace.
What is a lifestyle spending account or LSA?
A lifestyle spending account is a type of benefit that provides employees with a set amount of money each year to spend on a variety of non-traditional benefits, such as travel, entertainment, gym memberships, child care, or pet care. The exact benefits that are covered can vary depending on the employer, but in almost all cases, employers fully fund the lifestyle spending account. Lifestyle spending accounts generally cost from $1 to $6 per employee, per month. Generally, the amount funded by the employer ranges from $200 to $400.
Advantages of a lifestyle spending account:
– Flexibility: One of the biggest advantages of a lifestyle spending account is that it provides employees with more flexibility in how they use their benefits. This can help employees tailor their benefits to their individual needs and preferences.
– Covers a variety of expenses: A lifestyle spending account can cover a wide range of non-traditional benefits, which means that employees have more options to choose from.
– Can improve work-life balance: By providing benefits like gym memberships or child care, employers can help employees better balance their work and personal lives, which can lead to improved job satisfaction and productivity.
Why medZERO may be a better choice for employers:
While a lifestyle spending account can provide flexibility and cover a wide range of expenses, medZERO is a more targeted and cost-effective way for employers to support their employees’ healthcare needs and improve overall retention and satisfaction. By offering an ongoing benefit that helps employees manage their healthcare expenses, employers can demonstrate that they care about their employees’ financial wellbeing and overall health. Additionally, medZERO is a more targeted benefit that directly addresses a common pain point for employees, whereas a lifestyle spending account may not be as focused on healthcare expenses.
Another important difference between medZERO and a lifestyle spending account is that employers typically fully fund the lifestyle spending account, whereas employees are responsible for repaying the funds they use with medZERO. While a fully funded lifestyle spending account may seem like an attractive benefit for employees, it can be more expensive for employers in the long run. In contrast, medZERO allows employers to provide a valuable healthcare benefit without incurring significant ongoing costs.
Furthermore, medZERO may be a more attractive benefit for employees who are facing significant healthcare expenses given its higher spending limits. While a lifestyle spending account can cover a variety of non-traditional benefits, it may not be as useful for employees who are struggling to pay for medical care or who have high out-of-pocket healthcare expenses. In contrast, medZERO provides employees with an affordable and convenient way to pay for their healthcare expenses over time, without incurring interest or fees.
Summary:
| Feature | medZERO | LSA |
|---|---|---|
| Type of Benefit | Healthcare benefit that provides on-demand access to funds to pay for out-of-pocket healthcare expenses over time, at zero interest and zero fees. | Lifestyle benefit that provides a set amount of money each year to spend on a variety of non-traditional benefits, such as entertainment, travel, gym memberships, child care, or pet care. |
| Cost | Generally costs between $2 and $3 per employee per month. | Typically incurs an admin fee of $1 to $6 per employee per month. |
| Funding | Employees can access funds up to $1,500 to $5,000 fully funded by medZERO which are repaid over time at no interest or fees (pre-tax for employees with an HSA>) | Fully funded by employers, with employees typically having access to $200 to $500 per year. |
| Targeted Benefit | Specifically designed to help employees manage healthcare expenses. | Covers a wide range of non-traditional benefits, which may not be as focused on healthcare expenses. |
| Advantages for Employees | Helps employees manage healthcare expenses, zero interest and fees, more targeted benefit, supports diversity, equity, and inclusion. | Provides flexibility in how benefits are used, covers a variety of expenses, can improve work-life balance. |
| Advantages for Employers | Cost-effective way to provide a valuable healthcare benefit, more targeted benefit, can improve retention and attract new talent. | Can provide flexibility and cover a wide range of expenses, can improve job satisfaction and productivity. |
Conclusion:
While a lifestyle spending account can provide flexibility and cover a wide range of expenses, medZERO is a more targeted and cost-effective way for employers to support their employees’ healthcare needs and improve overall retention and satisfaction. By offering an ongoing benefit that helps employees manage their healthcare expenses without incurring interest or fees, employers can demonstrate that they care about their employees’ financial wellbeing and overall health. Additionally, medZERO is a more targeted benefit that directly addresses a common pain point for employees, and is a more cost-effective solution for employers. Overall, employers should carefully consider their options and choose the benefits that are most likely to meet their employees’ needs and improve overall satisfaction and retention.
