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How Wellness Spending Accounts Work








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Employers fund a master account that employees can use for eligible wellness purchases. Employees submit claims for reimbursement up to annual limits. Unused funds revert to the company.

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Everything You Need to Know About Wellness Spending Accounts in Canada

Wellness spending accounts (WSAs) offered by employers are gaining popularity as a way to promote health and well-being. These accounts provide taxable dollars employees can use towards purchases supporting their physical, mental, and financial health.

If your employer offers a wellness spending account, this comprehensive guide will explain how these accounts work, what expenses are eligible, how to access benefits, and tips to maximize value.

What is a Wellness Spending Account?

A wellness spending account is an employer-sponsored program that allocates taxable dollars for employees to spend on items and activities promoting health and wellness.

These accounts are also referred to as:

- Health and wellness accounts
- Lifestyle spending accounts
- Lifestyle and healthcare spending accounts

Regardless of terminology, the purpose is providing funds for employees to make purchases related to improving overall well-being.

Some examples of common eligible wellness account spending expenditures include:

- Gym and fitness class fees
- Weight management programs
- Meditation and yoga apps
- Nutrition classes and counseling
- Massage therapy
- Stress management workshops
- Financial wellness apps or coaching

The list of qualifying purchases depends on the guidelines established by the employer and the WSA provider administering the program. The key is all items must encourage health in some form, whether physical, mental, or financial.

How Do Wellness Spending Accounts Work?

Wellness spending accounts have a simple administration process:

- Employers partner with a WSA provider to set up the program.
- Employers determine annual contribution limits per employee. This is the account “balance.”  
- The employer transfers monthly funds into a master account to cover claims.
- Employees pay for wellness products and services out of pocket and keep receipts.
- Employees submit claims with documentation to the WSA provider for reimbursement.  
- If approved, the provider reimburses the employee from the master account up to the available balance.
- Any unused funds at year-end are forfeited back to the employer. No rollover or accumulation.

This structure provides freedom for employees to use funds as desired within account guidelines while also controlling overall program costs for employers.

What Expenses Do Wellness Spending Accounts Cover?

Wellness spending accounts take a comprehensive approach to health and well-being. The list of eligible expenses is extensive and covers four main categories:

- Gym memberships
- Personal training fees
- Exercise equipment and wearables  
- Youth sports registration fees
- Race entry fees
- Fitness retreats

- Weight management programs or apps
- Nutrition classes and counselling  
- Meal delivery programs
- Hydration products
- Nutritional supplements

Personal Development  
- Meditation, mindfulness, and yoga resources
- Stress management workshops
- Life coaching
- Professional/career development courses

Mental Health
- Counselling copays
- Relationship counselling
- Meditation classes
- Addiction support programs
- Mental wellness apps

Generally, any product or service promoting health can qualify if it aligns with the guidelines established for the specific program. Employers have flexibility to customize categories based on company culture and benefits philosophy.

The key deciding factor is that all expenditures must provide some form of health or wellness benefit, whether physical, mental, professional, or financial. Everyday general living expenses do not qualify.

Benefits of Offering a Wellness Spending Account

Wellness spending accounts offer advantages for both employees and employers.

Benefits for Employees:

- Covers popular wellness expenses not typically included in benefits plans
- Provides choice and flexibility to spend funds how best fits their needs  
- Rewards employees for making health-conscious purchasing decisions
- Introduces new wellness focused products and activities
- Streamlined experience with no claims paperwork

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