Tag: Dependent Care

Question: When an employee is on leave, can the employee continue participating in a flexible spending account (FSA) program and make catch up contributions upon return to employment? Answer: Yes, the employee may make catch-up contributions to a health flexible spending account (FSA) upon returning from leave, assuming the employer’s benefit plan document allows for…

Question: Can an employee pay the cost of preschool with a dependent care flexible spending account (FSA)? Answer: Expenses for a child in nursery school, preschool, or similar program for children below the level of kindergarten are considered reimbursable expenses for dependent care. These programs may provide an educational and or social experience; however, the primary…

Question: What is the grace period after the plan year ends for an employee with a Dependent Care FSA to use the funds? Answer: The IRS allows for a grace period of up to two months and 15 days after the plan year ends. However, an employer may adopt a different grace period within that…

Question:  Can you stop your FSA contributions for dependent care in mid-year? Answer: The employee’s selection is irrevocable for the plan year unless the employee experiences a change in status or other qualified event as defined in the IRS Regulations addressing mid-year election changes and your plan permits such qualified changes.   The first thing we…