Have you recently changed employers? Or are you considering making a change? Fortunately, when you participate in a health savings account (HSA) through your employer, your HSA stays with you. There are plenty of myths about HSAs, so let’s tackle what really happens to your HSA when you change employers. You Have Options HSA...
As we enter another season of open enrollment, one crucial topic is top of mind for many employees: HSA and FSA compliance. Health savings accounts (HSAs) and flexible spending accounts (FSAs) are often misunderstood, despite their significant financial advantages. It’s time to clarify the ins and outs of these tax-saving healthcare accounts and answer HSA...
When it comes to navigating the world of employee benefits, there’s a lot to take in, especially if you’re a first timer. Among the suite of benefits you’re likely to be offered, voluntary benefits are often misunderstood. In this blog we explore all the unknown voluntary benefits terms and bring clarity of information to first-time...
The IRS released 2025 contribution limits for medical flexible spending accounts (medical FSAs), commuter benefits and more as part of Revenue Procedure 2024-40. These limits undergo annual adjustments to account for inflation. 2025 Medical FSA Contribution Limits (including limited and combination FSAs) 2024: $3,200 per year 2025: $3,300 per year 2025 Medical FSA...
If you’re an employer, is your in-house benefits administration team struggling to juggle the multitude of complexities behind running a successful benefits administration program? Are you spending too much time and resources trying to keep up to date with compliance changes and providing the technology and services your employees need for a positive benefits experience?...
Whether you’re transitioning from your parents’ insurance, landed your first full-time job or are simply obtaining coverage for the first time, choosing health plans and employee benefits can be overwhelming. You’ll likely hear a lot of terms and acronyms that you’ve never heard before. For starters, let’s look at a few considerations when evaluating health...
According to the Bureau of Labor Statistics, employers typically pay around 80% of traditional employer-sponsored healthcare plans on behalf of employees. With rising healthcare costs, your business is most likely struggling to solve this key problem: how to maintain financial stability while providing robust benefits to your employees. But what solutions can actually provide benefits...
The concept of work-life balance has become more than just a buzzword; it’s a necessity for employee satisfaction and retention. According to WorkLife.news, employers are increasingly recognizing the importance of providing ample time off to their employees with more than 80% of U.S. employers planning to change their leave policies over the next two years....
Did you know employers can enhance their benefits offerings by incorporating voluntary benefits? What exactly are voluntary benefits and how can employers design an effective plan? We sat down with Hugh McDaniel, manager of channel partnerships at WEX, to get his insights on crafting voluntary benefits plans that meet the diverse needs of employees. ...
A dependent care flexible spending account (FSA) lets participants set aside pre-tax dollars to help pay for dependent care. Contributing to this benefit reduces taxable income and spreads the benefits of pre-tax dollars throughout the year, helping individuals save 30 percent or more (based on their tax rate) on dependent care costs.
Dependent Care FSA Eligible Expenses
Funds can be used to pay for childcare for children under the age of 13 when they’re claimed as qualifying dependents. The savings potential isn’t limited to childcare. They can also cover care for a disabled spouse or dependent of any age.
To be eligible for dependent care FSAs when offered through an employer, the individual and spouse (if applicable) must be employed or their spouse must be a full-time student or looking for work.
Big Savings Potential
Let’s say an individual enrolls and contributes $5,000 per year into a dependent care FSA in 2024 and pay the average American tax rate of 24.8 percent. By putting money aside pre-tax in a dependent care FSA rather than allowing the funds to be taxed, they would save over $1,200 this year!
For married couples who file taxes separately, the 2024 limit is $2,500 per person per year.
Note: Employers may offer these limits but are not required to.
Fast and Simple Reimbursement
If an individual participates in a dependent care FSA by Advantage Administrators, they will have two options for collecting reimbursement:
Weighing the Tax Credit vs a Dependent Care FSA
The IRS offers a tax credit to those who have childcare or dependent care expenses. Individuals can’t enroll in a dependent care FSA and apply for the tax credit with the same funds. The tax credit is up to $6,000 per year for two or more children.
It’s possible to apply the tax credit to the difference of what was put into dependent care and the tax credit. For example, if someone is putting $5,000 into the account that would leave $1,000 they can apply the tax credit to before they reach the $6,000 ceiling for the credit.
Other Dependent Care FSA Questions
What Specific Benefits can I get from a Dependent Care FSA?
Individuals can use a dependent care FSA to pay for preschool, summer day camp, before or after school programs and child or adult daycare.
The information in this blog post is for educational purposes only. It is not investment, legal or tax advice. For legal or tax advice, you should consult your own counsel. To stay up to date on benefits trends and insights, subscribe to our blog.
Flex Plans
Forms
HSA
HRA
Retirement
Health Shopper
FSA Store