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Dependent Day Care FSA? (NBR)

vanessa999vanessa999
in June 2011 Moms

The company I work for was bought out by a bigger company so we are having to enroll in all new benefits, the company offers a dependent day care FSA. I think I get the jist of how it works but I wanted to see if any of you ladies have one and let me know how you feel about it.

 My HR lady wasn't too helpful, but my understanding is that I contribute a certain amount of money every paycheck and I pay directly for day care and then submit for reimbursement. DH does not like the idea of getting it taken out of my paycheck and also having to pay for it upfront. I like the idea of doing it because it is pre-tax dollars and my company matches 10% of whatever I contribute. Any insight on this ladies?

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Re: Dependent Day Care FSA? (NBR)

  • WulfgarWulfgar member

    Explain to your DH that first it is pre-tax dollars so you will have more left after taxes then paying for it after taxes.  Also, why would he want to give up 10% more?

     

    My only word of caution is to make sure that you under estimate since this is a use it or lose it account just like the medical portion.  Also, depending on how fast the turn around is, you will only be out of the money for a week or so.  Once you pay the first round, just take the reimbursement and use it to pay the next one.

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  • vanessa999vanessa999
    Thanks! I did break it down for him and we don't even have to worry about under estimating because there is the 5,000 contribution limit and her daycare for the whole year is way more than that so we're definitely going to do it.
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  • mamarazzi528mamarazzi528 member
    We use this and like you said, daycare for 1 year is way more than the max amount so that's what we take out.  It is kinda awkward to juggle paying up front and getting reimbursed, but tax free money is worth it!  Plus, you'll forget it's coming out of your check and when you finally get reimbursed it's like a bonus!  Haha.  At least that's what happens to us when we forget to submit claims for awhile.
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  • IdigDirtIdigDirt member
    That is awesome that they match 10%!! That is like an automatic raise! Also I would say I save about $50 a month by having them take it out pretax so it is great. I submit mine once a month so I don't have to be filling out paperwork and faxing stuff every week and it is great. 
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  • CarlaAndJamesCarlaAndJames member

    That matching is awesome! That's like a $500 discount on your daycare for the year!

    We basically just submit claim receipts as we pay at daycare, so we've always submitted more than we've contributed at any given time. So each month we pay daycare, get my paycheck, and then get the money that was deducted from paycheck just a day or two later, tax free. Works great!

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  • JavaVino910JavaVino910 member

    I agree with the other ladies- being able to save the money pre-tax is a great benefit and the match from your employer is awesome! It's really a no brainier- you should definitely do it!

    It takes a little time to get used to the paperwork and how the reimbursement works, but it's definitely worth it!

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  • SunidazeSunidaze member

    I have it...had issues with it earlier this year, but I have learned how the specifics of the company that manages our FSA and it has been going smoothly now for the last several months.  I go for the full amount allowed ($5000) under federal guidelines ($5000 for those married, filing jointly or single and $2500 for those married, filing separately).  I get paid semi-monthly - which means 24 pay periods annually/208.33 out of each check pre-tax (or $416.66 monthly).  I pay weekly for Stella's daycare and then at the end of each month, her daycare will give me a statement of my account which I turn around and submit (via fax) for reimbursement (with a claim form specific to that company).  I have a separate savings account which I have the money directly deposited into and turnaround time is about a week.  Some people will wait several months or until the end of the year to submit for reimbursement, but the way I see it, by having it deposited into a separate account monthly, not only was the money deducted from my paycheck pretax, but I could also earn a little interest on it if it is deposited monthly into a savings account rather than letting our FSA company hold on to it until the end of the year.

    I haven't heard of company matching an employee's contribution to any FSA accounts (honestly didn't even know that was allowed) but if that is the case, I would definitely take advantage of it! 

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  • JavaVino910JavaVino910 member
    imageSunidaze:

    I haven't heard of company matching an employee's contribution to any FSA accounts (honestly didn't even know that was allowed) but if that is the case, I would definitely take advantage of it! 

    My work contributes $2,500 to each associate's HSA or FSA. So, it's not unheard of.

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  • SunidazeSunidaze member
    imageJavaVino910:
    imageSunidaze:

    I haven't heard of company matching an employee's contribution to any FSA accounts (honestly didn't even know that was allowed) but if that is the case, I would definitely take advantage of it! 

    My work contributes $2,500 to each associate's HSA or FSA. So, it's not unheard of.

    Jealous.  We get no company contribution to the FSA, but we do get a contribution to our HSA ($1000 family coverage or $500 for single coverage plans).

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  • vanessa999vanessa999

    Thanks for all the input ladies! We are definitely doing it! Also, OMG your work contributes $2,500? That is crazy! In the most awesome way lol 

    imageJavaVino910:
    imageSunidaze:

    I haven't heard of company matching an employee's contribution to any FSA accounts (honestly didn't even know that was allowed) but if that is the case, I would definitely take advantage of it! 

    My work contributes $2,500 to each associate's HSA or FSA. So, it's not unheard of.

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  • vigurlvigurl member
    imageSunidaze:
    imageJavaVino910:
    imageSunidaze:

    I haven't heard of company matching an employee's contribution to any FSA accounts (honestly didn't even know that was allowed) but if that is the case, I would definitely take advantage of it! 

    My work contributes $2,500 to each associate's HSA or FSA. So, it's not unheard of.

    Jealous.  We get no company contribution to the FSA, but we do get a contribution to our HSA ($1000 family coverage or $500 for single coverage plans).

     

    WHAT?!  What word is stronger than jealous b/c that is what I am !  I pray we get that once our merger is complete.

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