Wellness Spending Account (WSA) Eligible Expenses

A Wellness Spending Account (WSA) allows employers to reimburse employees for a range of non-medical wellness expenses. Here’s what’s typically covered under most WSA plans.

Common Eligible WSA Expenses

A Wellness Spending Account (WSA) typically covers a wide range of non-medical expenses that support employee well-being. These are not eligible for tax-free reimbursement under a Health Spending Account (HSA), but they can be offered as taxable benefits through a WSA.

Below is a list of common WSA-eligible expenses:

Fitness and Physical Health

• Gym memberships – Monthly or annual memberships to fitness centres
• Yoga and fitness classes – In-person or virtual group classes
• Personal training – One-on-one fitness coaching sessions
• Fitness equipment – Items like kettlebells, yoga mats, or resistance bands
• Sports league fees – Registration for intramural sports or recreational leagues

Mental Health and Wellness

• Meditation or mindfulness apps – Subscriptions like Headspace or Calm
• Wearable tech – Products like Oura Ring and Roga
• Life coaching – Goal setting, mindset coaching, and personal growth sessions
• Smoking cessation programs – Support programs to quit smoking or vaping

Nutrition and Lifestyle

• Nutritionist or dietitian consultations – Non-medical dietary guidance
• Financial planning or coaching – Personal finance, budgeting, or debt management help
• Language learning courses – Tools like Duolingo Plus or in-person classes
• Art or creativity classes – Pottery, painting, photography, or other creative workshops

Keep in mind: Employers can customize which of these categories they wish to allow through their WSA policy.

What’s Not Covered by a WSA?

While a WSA provides flexibility to support employee wellness, it’s essential to understand which expenses do not qualify. WSAs are designed to cover non-medical, lifestyle-oriented expenses, meaning they typically do not cover traditional health or dental costs.

Ineligible WSA Expenses (Typically Covered by HSAs Instead)

• Prescription medications – Only eligible under a Health Spending Account (HSA)
• Dental and vision care – Including cleanings, fillings, or eye exams
• Massage therapy – Unless framed as a general wellness service and explicitly allowed by the employer
• Chiropractic treatments – Considered medical and thus not WSA-eligible
• Medical equipment and devices – Hearing aids, CPAP machines, crutches, etc.
• Health insurance premiums – Cannot be reimbursed through a WSA
• Over-the-counter medical supplies – including bandages, pain relief products, and more.

These expenses may still be eligible under a Health Spending Account, which is a tax-free plan specifically designed to cover medical and dental care costs.

FAQs about WSAs

1. Is Wellness Spending Account taxable?
   
   • Yes. WSA reimbursements are considered taxable benefits to the employee and must be reported as taxable income on the employee's T4 slip.
2. Can a Wellness Spending Account and a Health Spending Account be used together?
   
   • Yes. Many employers offer both: an HSA for tax-free health and dental expenses, and a WSA for taxable wellness and lifestyle benefits.
3. What expenses qualify under a Wellness Spending Account?
   
   • Eligible WSA expenses typically include non-medical wellness items such as gym memberships, yoga classes, meditation apps, personal coaching, and nutrition consultations. Employers can choose which categories to allow. Download our complete list of WSA-eligible expenses.
4. What happens to unused WSA funds at the end of the year?
   
   • That depends on how the employer structures the plan. Some allow rollover, others expire unused funds. BeniPlus lets you customize this setting.
5. Can I customize what’s covered in my company’s WSA plan?
   
   • Yes. With a Wellness Spending Account (WSA), employers have complete control over which expenses are eligible for reimbursement. You can choose from a wide range of wellness-related categories, such as fitness, mental health, nutrition, or personal development, and customize the plan to align with your company’s culture and budget. BeniPlus makes it easy to set these preferences during the setup process.

Wrap Up

A Wellness Spending Account (WSA) is a smart way for employers to offer lifestyle-based benefits — from yoga classes to financial coaching — even without a traditional group insurance plan. When paired with a Health Spending Account (HSA) or a traditional group plan, it creates a complete, flexible benefits offering.

At BeniPlus, we help Canadian businesses offer customizable, cost-effective benefit plans in minutes. Speak with our team to learn more.

Sources:

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances.html