In our latest survey, 8 in 10 said benefits could be useful for DEI. But only 65% are currently using benefits for that purpose. Among those, more than half believe it’s not making a meaningful impact.

You can change that.

Below we highlight four benefits that can positively impact your DEI initiatives—and change your people’s lives.

Dependent Care FSA

According to a recent study, the cost of childcare has risen 41% since the start of the pandemic. In many lower-paid households, childcare costs twice as much as the mortgage. 

The latest data shows that there are six states in which childcare costs more than 40% of the median single-parent income. And in 28 states the cost of childcare exceeds the cost of college tuition.

Lower-paid employees are hit especially hard by the rising cost of childcare.

That’s why more employers are offering Dependent Care FSAs (DCFSA). These accounts let employees take advantage of tax-free money to help offset exploding childcare costs.

By making pre-tax payroll contributions, employees pay neither income taxes nor FICA payroll taxes.* This gives employees potentially 20% (or more) extra tax savings to put toward childcare expenses.

You can boost that support even more by offering employer DCFSA contributions—and making contributions directly to employee accounts. Many employers offer $500 or $1,000 to help their employees with that burden.

You can even choose to tier contributions based on employee wages. Giving greater contributions to lower-paid employees can help create a more equitable workplace.

Transit Benefits

With high gas prices and unrelenting inflation, nearly 20% of the average salary is going to commuting costs. Of course, that percentage is higher for lower-paid employees. 

Evidence shows that higher-income residents have greater commute access, especially as gentrification drives lower-paid families further outside commercial centers.

Commute inequities stem from more than wealth, however. Consider that, on average, black employees face commute times more than 20 minutes longer than white employees. This owes largely to access limitations along with relatively longer commute distances.

Your employees are looking to you to help alleviate the commute burden. The good news it there are several easy solutions available to you. We can help you stand up simple programs to boost tax savings. Or help you develop and launch sophisticated post-tax commute management programs with income-tiered subsidies.

Bottom line, there are practical Commuter Benefits for every DEI goal

Health Savings Account

Healthcare costs in the United States are rising faster than anywhere else in the world, and it's hitting lower paid and nonwhite Americans especially hard. Consider nonwhite Americans are less likely than white Americans to be able to cover a $500 medical bill. This is a pattern which partly contributes to health disparities and unequal outcomes.

Health Savings Accounts (HSAs) are one of the most effective ways to give employees resources for healthcare.

First, they offer valuable tax savings^ because they let employees make pre-tax contributions with payroll deductions. So, employees are never taxed on the money they put into their account. And they’re not taxed when they spend either, provided they use the money for qualified medical expenses.

Second, HSAs are always paired with high-deductible health plans, which means lower premiums for health insurance. Lower premiums can add up to thousands of extra dollars each year.

In addition, you can give employees an HSA contribution when they sign up. Employer contributions can be invaluable because they give employees an instant healthcare emergency fund. They no longer need to worry about whether they can afford that $500 medical bill. 

In our recent survey, 8 in 10 employers said they offered an employer contribution of some kind.  

Our own client data shows that many offer a $1,000 contribution. But some offer even more. Others will complement an initial contribution with an HSA contribution match—much like a 401(k).

Although 8 in 10 employers offer a contribution of some kind, only a small fraction offer income-tiered HSA contributions. This is a little surprising because income-tiered healthcare premiums are relatively common across many employers—especially large employers.

If you offer income-tiered premiums, why not income-tiered HSA contributions too? It can be a great way to reinforce your commitment to fairness and benefits equity.

Lifestyle Spending Account

Every company is unique. Employees bring different needs. And challenges and goals shift as conditions change.

To stay ahead of the curve, benefits teams need to think beyond off-the-shelf options. Unique needs require fully customizable solutions.

That’s where Lifestyle Spending Accounts (LSAs) come into play. LSAs are reimbursement accounts that are easily configured to reimburse any activity or employee need.

Here are a few examples: 

• Subsidize surrogacy costs
• Provide travel stipends for healthcare
• Cover behavioral health treatment
• Offer tuition assistance

*DCFSAs are never taxed at a federal income tax level when used appropriately for qualified medical expenses. Also, most states recognize FSA funds as tax deductible with very few exceptions. Please consult a tax advisor regarding your state’s specific rules.

^HSAs are never taxed at a federal income tax level when used appropriately for qualified medical expenses. Also, most states recognize HSA funds as tax deductible with very few exceptions. Please consult a tax advisor regarding your state’s specific rules.

HealthEquity does not provide legal, tax or financial advice. Always consult a professional when making life-changing decisions.

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