What is a wellness stipend: Complete guide

A recent study from Gallup shows that burnout now costs businesses around $322 billion globally in turnover and lost productivity. To tackle this, companies are investing in their team’s well-being.

One growing trend is offering a wellness stipend as a flexible way to improve mental, financial, and physical health. For a long time, workplace wellness meant a free gym membership, but today’s employees want more personalized wellness plan examples.

Whether it’s monthly yoga classes or a subscription to a meditation app, a wellness stipend lets employees choose what works for them. That’s why this benefit is becoming a key part of the future workplace health programs.

Let’s break it all down, shall we?

What is a wellness stipend?

A wellness stipend is money an employer gives to employees to spend on health and wellness. Unlike strict benefits plans, employees get to decide how to use them. 

The goal is to help employees feel healthier, happier, and more focused on their own terms.

Companies may offer a fixed amount every month, quarter, or year. The employee can then use it on wellness plans like:

• Financial planning tools
• Monthly yoga classes
• Subscription to a meditation app
• Standing desk for their home office
• Therapy or life coaching sessions
• Gym memberships or fitness apps
• Even more

Employees typically pay first, and then they get reimbursed by the company. The wellness allowance is a taxable benefit, and employers can either cover the tax or list the wellness spending account on each employee’s W-2 form as taxable income. 

Many firms opt to give an all-inclusive recurring stipend for employees.

How does a stipend differ from other wellness benefits?

A wellness stipend stands out from other health-related benefits because of its flexibility.
While many workplace health programs focus on medical care, a wellness allowance offers employees the freedom to choose how they will support their well-being. Whether it’s paying for a gym membership or a fitness tracker, they decide depending on what helps them feel their best.

Health Savings Account (HSA)

A health savings account is more tied to a high-deductible health insurance plan. Employees can only use it for qualified medical expenses like doctor visits, prescription drugs, or medical devices.

HSAs offer tax benefits and enable both employers and employees to contribute. However, the money is spent on healthcare-related costs. It focuses on managing medical bills rather than supporting general wellness.

Health Reimbursement Arrangement (HRA)

A Health Reimbursement Arrangement is fully funded by the employer. Like HSAs, HRAs are designed to assist in covering medical expenses, and employees can’t add their own money. Unlike a wellness stipend, unused HRA funds typically don’t go with the employee if they leave the company.

Wellness Reimbursement Programs

Wellness reimbursement programs appear similar to a stipend, but it has more limits. Employees pay upfront for specific fitness and health services like gym memberships. They then submit receipts to get their money back. The program often comes with rules about eligibility and may include pre-approved vendors.

The big difference is that a wellness stipend offers more freedom and is simpler to use. It caters to the employees overall wellbeing, including mental health, financial health, and lifestyle choices.

Unlike HSAs and HRAs, which are tied to healthcare plans and strict guidelines, a stipend enables employees to personalize their wellness journey in a way that fits their individual needs.

7 types of wellness stipends

Wellness stipends come in many forms. Some companies prioritize physical health, while others aim to improve mental, financial, emotional, and even social well-being. 

Let’s look at the different types of wellness stipends that employers offer today.

1. Mental wellness stipends

Mental wellness stipends are becoming popular as more companies notice the importance of emotional wellbeing in the workplace. These allowances can cover therapy sessions, mental health apps, online counseling, and life coaching.

2. Physical wellness stipends

Physical wellness stipends are one of the most common types. They enable employees to gain access to gym memberships, personal training sessions, yoga, or fitness classes. Some employers even cover wearable fitness devices or home workout equipment.

3. Nutritional wellness stipends

This allowance supports healthy eating habits. Employees can use funds for healthy meal delivery kits, consultations with a nutritionist, cooking classes, and more. Some employers may also reimburse for supplements.

4. Financial wellness stipends

Financial wellness stipends are meant to assist in reducing stress caused by financial issues. It covers personal finance coaching, budgeting software, and even helps with student loan payments. By reducing money-related anxiety, your employees can feel more in control of their future.

Interested in implementing a workplace wellness program?

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5. Social wellness stipends

Social wellness stipends focus on building meaningful connections. This might look like hobby-based classes, team-building experiences, or events that bring people together. Some companies can also cover the costs of recreational clubs that promote belonging and balance outside the workplace.

6. Environmental wellness stipends

Environmental wellness stipends improve the physical space where employees live or work. It can be used to make home office upgrades like standing desks, better lighting, or ergonomic chairs. Some employers support eco-friendly tools like air purifiers or indoor plants.

7. Lifestyle and preventative wellness stipends

These allowances are broader and might include chiropractic care, massages, skincare products, or wellness retreats. This wellness stipend idea enables employees to care for themselves in ways that prevent bigger issues later. Some companies offer spiritual wellness with money for mindfulness retreats, yoga workshops, or self-care tools.

Employers usually mix and match these categories. However, some offer a flexible wellness allowance that can be used across all these areas. While offering support in more than one category, companies assist employees in taking care of their whole selves, not just their bodies and workstations.

What is the average amount spent on wellness stipends?

This WifiTalents report of Corporate Wellness Statistics shows the varying amounts companies spend on average on wellness stipends. The variance comes from the size of the company, its budget, and overall approach to employee wellness programs. 

Smaller companies with fewer than 50 employees offer between $20 and $50 per employee each month. This is enough to cover gym membership, a subscription to a wellness app, and a few fitness classes.

Medium-sized companies, with employees between 50 and 500, often give slightly more. 

Typically, the stipend is between $50 and $150 monthly. With these funds, employees have more flexibility when combining services. They can buy healthy groceries while also subscribing to a meditation app or taking a yoga class.

Larger organizations with more than 500 workers often have bigger wellness budgets. They may provide stipends ranging from $151 to $500 monthly. It gives workers enough support to invest in several areas of wellness, like ergonomic home office tools, therapy, and nutrition.

Even if a company does not offer a stipend, a 2023 Workplace Wellness Survey from EBRI shows that average workers still spend about $100 monthly on wellness-related expenses, revealing how wellness stipends are essential.

They help cover the costs of staying healthy and, at the same time, show employees their company cares.

29 Creative ideas for spending your wellness stipend

These allowances can be used in many wellness stipend ideas. Here are 29 fresh ideas, grouped by type, to help your employees get the most from their wellness funds.

Mental wellness

1. Meditation apps: Help reduce burnout and stress, improving focus with guided meditation.
2. Virtual therapy sessions: Employees can talk to a licensed counselor from the comfort of their home.
3. Life coaching programs: Allow employees to get personal guidance on setting and reaching goals.
4. Sleep tracking tools or apps: These tools will help workers monitor and improve their sleep for better daily performance.
5. Journaling kit: Employees can use prompts and guided writing to reflect and manage their emotions.
6. Blue-light blocking glasses: Reduce digital eye strain and improve sleep quality.
7. Sound machines or white noise apps: Create a calm space for better rest.

Physical wellness

1. Gym memberships: Enrolling in a fitness class will ensure they stay active and motivated with regular access to fitness facilities.
2. Home workout equipment: People who prefer home workouts can set up a personal gym space with a treadmill, resistance bands, or dumbbells.
3. Online fitness class: If workers don’t want to go to a gym, they can join live or on-demand workouts, from yoga to HIIT.
4. Wearable fitness trackers: They can use the money to buy fitness trackers like a smartwatch to monitor steps, heart rate, and sleep to stay on track.
5. Massage or bodywork sessions: Enroll in sessions that relieve muscle tension and reduce physical stress.
6. Personal training sessions: Employees can hire an expert to help build strength, stamina, and flexibility.
7. Sports league or team fees: Another physical wellness idea to spend the stipend on is joining a local team. It helps people stay fit and build community.

Nutritional wellness

1. Healthy meal kit subscriptions: With such subscriptions, they can make balanced, home-cooked meals with less preparation time.
2. Grocery delivery services: They can subscribe to grocery delivery services if their budget is limited. It saves time while shopping for nutritious food options.
3. Nutritionist consultations: During these consultations, they will learn how to eat for energy, focus, and long-term health.
4. Blenders or juicers: Getting these home appliances will ensure your employees make juices and smoothies that support their wellness goals.
5. Cookbooks focused on wellness: A simple cookbook can help them discover new recipes that support healthy, clean eating.
6. Vitamin or supplement subscriptions: These supplements fill the nutritional gaps with personalized products.

Water tracking apps or bottles: They help you to stay hydrated by reminding you to drink water using smart tracking tools.

Financial wellness

1. Budgeting and finance apps: They can control their finances and plan for the future.
2. Personal financial coaching: If they have enough money in their stipend kitty, they can get an expert to help them when it comes to debt, savings, and investing.
3. Credit monitoring services: It will protect their identity and monitor their credit score.
4. Student loan repayment assistance: Employees can also get this service to help reduce their debt and lower financial stress.

Social & lifestyle wellness

To get a lifestyle balance beyond the workplace, there are several things employees can indulge in to fully take care of themselves and avoid bigger issues. They include:

1. Hobby classes (art, music, cooking): Help them relax and connect with passions outside of work.
2. Coworking space membership: They can stay motivated in a social work environment.
3. Volunteer event fees or supplies: Another way to maintain this balance is to give back to the community while boosting their emotional well-being.
4. Digital detox retreats or workshops: They can step away from screens and recharge with guided activities that promote mindfulness, real-world connection, and creativity.

Stipend vs wellness programs

While Stipend and wellness programs may appear similar, they serve different purposes. As mentioned above, stipends are focused on personal choice, where the employee can spend on whatever wellness activity that best works for them.

Meanwhile, a wellness program is structured and designed by the employer, often including group-based activities, company-wide health, or challenges that bring people together.  Teamupp is a great example of a group wellness program complementing a wellness stipend.

Instead of giving employees cash, Teamupp creates a shared wellness experience that encourages motivation, friendly competition, and teamwork. The app helps workers focus on their health while building stronger workplace relationships.

Implement an Annual Wellness Program

Teamupp includes features like:

• Step count competitions to keep movement fun and engaging
• Nutrition missions that encourage balanced eating
• Goal tracking with teammates so everyone can stay accountable together

Plans are affordable, depending on company size. By combining a wellness stipend for individual goals with a platform like Teamupp, companies can create a complete employee wellness program that supports every part of a person’s health.

Are wellness stipends really being used?

Yes, of course! But not as much as you might expect.

While these stipends are growing part of many employee wellness programs, their usage often relies on how visible and easy the benefit is to use. Data from the 2023 Dynamic Benefits for a Diverse Workforce by SHRM showed nearly 45% of U.S employers now give wellness stipends.

Despite similar reimbursements, many employees forget to use them or don’t fully understand how. This means companies must be proactive if they want their team to take advantage of the benefit. So, how can employers increase usage?

Here are some of the most effective ways to do so:

Set monthly reminders about spending wellness stipend

A simple email or calendar alert can make employees think, “Oh right, I haven’t used my wellness allowance this month.” These reminders keep the stipend in mind and help employees build a habit around it.

Highlight how others are using theirs

This is another smart move. For example, you can share a short story or a spotlight in the company newsletter. Something along the lines of “Nancy used her wellness stipend to buy a new set of running shoes! It can inspire other employees and create a sense of community.

Keep the claim process quick and simple

Employers can make a big difference by making the process simple. Long forms discourage people from bothering at all. A basic form, minimal documentation, and fast approvals can improve participation.

Form a list of tools and vendors

Instead of leaving employees to search on their own, companies can share a menu of eligible wellness apps and mental health services. This saves time and sparks ideas.

Consider building a wellness dashboard

For better results, you can create a wellness dashboard where workers can track their usage and remaining time. Some companies run mini-challenges or set small goals. For example, teams can use a stipend for three months and enter into a prize draw.

Here are some other friendly reminder that the stipends are meant to be enjoyed: 

• Offer quarterly wellness check-ins or virtual info sessions
• Add the stipend as a line item in pay stubs or HR portals
• Involve team leads or managers in promoting
• Celebrate “wellness wins” in company-wide updates

Build a stronger, healthier workplace with a wellness stipend

A wellness stipend is a simple and flexible way to invest in your team’s mental and physical health. Whether it’s used for nutrition plans or therapy apps, this benefit can support your employee wellness program. At the same time, it gives people the freedom to choose what works best for them.

By making it visible and easy to use year-round, your company can turn a basic stipend into a powerful workplace program that boosts overall wellbeing. Employers seeking wellness stipend ideas or ways to improve their wellness reimbursement process should start with what their team actually values, and then build from there.

Interested in implementing a workplace wellness program?

Discover Teamupp