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Questions and Answers About Dependent Care Accounts

Author: Sue Thomas

Category: COVID-19

On March 23, our blog included an entry to remind employers that employees losing their daycare arrangement could adjust their contributions to a dependent care account (DCAP). This reminder bears repeating, as new lay-offs and furloughs continue. There is only a 30-day window from the date of the event to request a mid-year change.

Other situations can also occur. An article by attorneys of DLA Piper addresses these situations:

  • May a participant be reimbursed for his or her normal childcare expenses if he or she is working from home?
  • May a participant be reimbursed for his or her normal childcare expenses if he or she is now working at home and the participant’s spouse is also at home because of loss of employment?
  • May an employee elect to stop his or her salary deferrals if he or she is now working from home and no longer has daycare assistance?
  • May an employee who is not currently participating in an employer’s dependent care assistance plan elect to participate as the result of his or her child, under the age of 13, being sent home due to school closures?
  • May an employee who is currently participating in an employer’s DCAP elect to change his or her salary deferral election as the result of his or her child, under the age of 13, being sent home due to closure of his or her day care center?

Plan sponsors may also want to consider adding a carry-over or spend-down provision to the DCAP. Each of these provisions gives employees additional time to use any funds accumulated in the account.

About the Author

Sue Thomas

Posted in: COVID-19

Posted by Sue Thomas

Director, Contracts & Compliance. Sue has more than 30 years of intensive, hands-on experience working with a wide variety of employee benefit plans. As the Director of Contracts and Compliance, Sue is responsible for the management of all BSG® client contracts, including insured contracts, service contracts, and self-insured contracts as well as ensuring that these materials comply with all applicable state and federal benefit regulations. A graduate of the University of Wisconsin-Milwaukee, Sue has completed the RHU program, six CEBS courses and holds a Life and Health agent license.

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