December 11, 2023
How brokers can leverage LSAs to win more business
Forward-thinking brokers are always looking for ways to differentiate their services and strengthen client relationships. The increasing popularity of LSAs combined with ever-improving technology to facilitate flexibility provides a significant opportunity. Brokers can leverage their position as a trusted benefits advisor to introduce high-performing LSA platforms, like JOON, that meet diverse workforce needs.
#1 LSAs can fill gaps in health insurance
Beyond being a legal requirement for many employers, providing health insurance is critical for workforces. However, there’s a growing gap between what health insurance provides and what many workers feel they need to achieve “healthiness.”
Health insurance is notoriously limited for areas like preventative care and mental health. According to SHRM, “employees’ satisfaction with their benefits fell to 61 percent in 2023, down from 64 percent in 2022 and reaching its lowest point in the past decade.” Among the reasons was a rapid increase in employee expectations for more holistic benefits packages that include financial wellbeing, mental wellbeing, and physical wellbeing.
This is both a challenge and an opportunity for brokers. While procuring health insurance is a key commercial activity, it’s no longer sufficient for most employers. LSAs are flexible enough to be customized to the employer’s needs. By leveraging LSAs to fill gaps, brokers can provide more value and differentiated services to their clients.
#2 LSAs can be introduced any time during the year
It’s difficult to build and sustain a relationship with a client that you only engage seasonally, during open enrollment. Unlike health insurance, LSAs are not regulated and can be launched or modified at any time.
Often, LSAs are an effective supplement if a client finds that their health insurance benefits aren’t competitive enough, or if they’re experiencing issues hiring or retaining talent. Being able to provide value year-round presents a significant opportunity for brokers.
#3 LSAs can consolidate other programs to reduce costs
Due to their flexibility and lack of regulation, LSAs also have the capacity to save clients’ money by consolidating various underutilized point solutions.
During the pandemic, many employers accumulated per employee per month subscriptions to various apps and services, from Employee Assistance Programs to remote learning libraries. They’re often shocked to discover that due to their restrictive nature and often intentionally bad user experience, utilization rates are in the single digits.
LSAs, in contrast, allow employers to consolidate multiple benefit categories under one umbrella, and give their workforces the ability to invest in benefits that are meaningful to them individually. Innovative solutions like JOON typically achieve 75% monthly utilization.
Brokerage firms that recommend industry-leading rather than legacy LSA solutions have the greatest opportunity to consolidate benefits and save money for their clients. Employers like Mile Two increased benefits utilization by 5x without increasing their budget, but instead by switching from restrictive point solutions to flexible ones.
#4 LSAs can promote affiliate partner brands
While not an explicit goal of LSAs, forward-thinking brokerage firms monetize LSA spending by providing incentives within benefits programs for workforces to spend at affiliate partner brands. For example, many brokerage firms partner with life insurance, caregiving, and continued education services.
LSAs provide an opportunity to give workforces the flexibility to spend at, while not being restricted to, such brands. Platforms like JOON showcase affiliate partners to workforces and provide transparent disclaimers for when purchases result in an affiliate fee.
The subscription fees and corresponding commission from an LSA launch may be insigificant compared to health insurance. However, the ability to monetize LSA allowances is a potential revenue-driver for firms that proactively partner with accommodating LSA platforms.
Lifestyle Spending Accounts represent a significant advancement in employee benefits. JOON’s groundbreaking card-connected LSA platforms is the industry’s most flexible, high-performing, and cost-effective solution. For benefits brokers, LSAs are an exciting opportunity to retain clients and win more business.