Maximizing Your Fitness Reimbursement Benefit for Employee Wellbeing
Offering a fitness reimbursement benefit is an excellent way to support employee wellness. However, when linked to mental health and productivity, its impact becomes even more powerful. With the right structure, fitness benefits can improve employee engagement, mental wellbeing, and overall productivity. But how can companies implement this benefit effectively?
Two common options include an in-house managed fitness reimbursement or a more flexible wellness spending account. Let's explore both options in detail, along with how they can benefit your employees and your organization.
Two Options for Fitness Reimbursement
When it comes to structuring a fitness reimbursement benefit, employers have options. The right choice depends on company resources, the preferences of employees, and how flexible the organization wants to be in offering fitness-related perks.
Option 1: In-House Managed Fitness Reimbursement
An in-house managed fitness reimbursement program is a more traditional approach. Employers set a budget for fitness-related expenses, and employees submit receipts or proof of payment for gym memberships, fitness classes, or other approved activities. Once verified, the employer reimburses the employee up to a pre-determined amount.
Advantages:
Cost-effective: One of the primary advantages of an in-house fitness reimbursement program is its cost-effectiveness. Employers only reimburse based on actual participation, avoiding the administrative costs of outsourcing benefit management to a third party.
Direct Control: Employers have direct control over the types of fitness activities that qualify for reimbursement, which can help ensure that only specific wellness-related expenses are covered.
Drawbacks:
Paperwork and Administration: Managing multiple reimbursement requests, verifying receipts, and keeping track of expenses can be time-consuming for HR teams. This administrative burden can grow significantly with larger workforces.
Privacy Concerns: Some employees might feel uncomfortable submitting reimbursement requests for certain activities, particularly those related to mental health, such as yoga or mindfulness programs. The fear of exposing personal fitness choices could discourage some employees from participating.
Limited Flexibility: Employees are typically only reimbursed for specific activities, such as gym memberships or fitness classes. This can limit the appeal of the program for employees who prefer alternative fitness options, such as home workout equipment or online fitness subscriptions.
While in-house reimbursement programs are cost-effective and easy to start, they may not offer the flexibility employees want and require significant administrative oversight.
Option 2: Wellness Spending Account (WSA)
A wellness spending account offers a more flexible and streamlined way for employers to provide fitness benefits. With a WSA, employers allocate a pre-set budget that employees can spend on a variety of wellness-related expenses, including fitness activities, wellness products, and mental health services.
Advantages:
Flexibility: The WSA allows employees to use their funds on a wide range of wellness options, from gym memberships to fitness equipment or culturally preferred activities, such as martial arts or tai chi. This flexibility makes the program more appealing to a diverse workforce.
Less Administrative Burden: Since employees manage their own spending through the WSA, there’s less paperwork and fewer administrative tasks for HR teams. Employees can choose their activities without having to submit multiple reimbursement requests.
Diverse Wellness Options: Employees can use the WSA not just for physical fitness but also for wellness apps, mental health-focused fitness programs, or virtual fitness classes—making it ideal for remote or hybrid workers.
Drawbacks:
Administrative Costs: Many WSA providers charge a small administrative fee for managing the account, usually a small percentage (around 10%) of the total amount claimed. While the cost is relatively minor, it adds to the overall program cost for the employer.
Potential for Unused Funds: Since employees have the freedom to manage their wellness spending, there may be instances where funds go unused, particularly if employees aren’t fully aware of the benefits or are unsure how to access the program.
Examples of WSA Flexibility
Employees can use the WSA for a wide range of fitness and wellness activities, including:
Gym Memberships or Yoga Classes: Employees can still use their WSA for traditional fitness activities like gym memberships, with the flexibility to choose.
Fitness Equipment: Whether it’s a new pair of running shoes, weights, or a yoga mat, employees can purchase the equipment they need to stay active and healthy.
Fitness Apps and Online Classes: For employees working remotely or who prefer virtual fitness options, WSAs can cover the cost of fitness apps, virtual classes, or subscriptions to online workout programs.
Alternative and Culturally Preferred Fitness Activities: Employees from diverse cultural backgrounds may prefer fitness activities like martial arts, dance classes, or tai chi. A WSA allows them to engage in fitness options that resonate with their culture, making the program inclusive and supportive of diverse preferences.
Fitness Benefits as a Tool for Engagement and Productivity
Fitness benefits extend beyond physical health—they have a direct and significant impact on mental health and workplace productivity. Employees who engage in regular physical activity experience reduced stress, improved focus, and better emotional resilience. Fitness has been shown to reduce symptoms of anxiety and depression, leading to higher energy levels and mental clarity. This is particularly important in today’s work environment, where stress and burnout are major concerns.
By supporting employee fitness, employers can foster a more engaged and productive workforce. Regular physical activity improves cognitive function, enabling employees to perform better in their daily tasks. Employees who feel healthier are more likely to stay motivated and engaged, resulting in higher retention rates and increased job satisfaction.
Fitness and Mental Health: A Vital Connection
The connection between fitness and mental health is well-established. Exercise releases endorphins, which are natural mood elevators. It also helps regulate sleep, reduces stress, and boosts self-confidence. When employees engage in fitness activities, they are better equipped to handle work-related stress and can maintain better emotional balance.
Employers who prioritize fitness not only support their employees' physical health but also contribute to better mental health outcomes. This holistic approach helps create a workplace culture where employees feel supported, valued, and more capable of managing the demands of their roles.
Which Option is Right for Your Organization?
Choosing the right fitness reimbursement option depends on your company’s goals and resources. If your priority is controlling costs and managing the program directly, the in-house managed fitness reimbursement may be a good fit. It’s cost-effective and easy to implement but can become burdensome in terms of paperwork and privacy concerns for employees.
On the other hand, if you want a more flexible and comprehensive solution that meets the diverse needs of your workforce, the wellness spending account is likely the better choice. It reduces administrative tasks and offers employees the freedom to manage their wellness journey, supporting both physical fitness and mental health. With more options, employees are more likely to engage in activities that suit their preferences, which can drive higher retention, satisfaction, and productivity.
Conclusion
Offering a fitness reimbursement benefit—whether through an in-house program or a wellness spending account—is a powerful way to support both the physical and mental health of your employees. By promoting regular exercise, employers can foster a more engaged, productive, and satisfied workforce. While both options have their advantages, the flexibility and inclusivity of a WSA make it an especially attractive choice for employers looking to offer diverse wellness benefits. Investing in fitness and wellness programs not only boosts employee wellbeing but also helps build a healthier, more resilient organization.