Back to School, Back to Benefits: How to Remind Employees to Use Their Dependent Care FSA
As summer winds down and the school year begins, many working parents are juggling new schedules, after-school programs, and childcare arrangements. It's also the perfect time for HR teams to remind employees about their dependent care flexible spending account (FSA).
While employees may enroll in a dependent care FSA during open enrollment, many don't think about the benefit again until they need reimbursement. A timely reminder can help employees maximize their pre-tax savings and better manage childcare expenses throughout the school year.
Why Fall Is the Right Time for a Reminder
Back-to-school season creates new childcare needs for many families. Employees may be paying for:
- Before-school care
- After-school programs
- Licensed day camps during school breaks
- Preschool or nursery school
- Babysitters or childcare providers that allow the employee (and spouse, if applicable) to work, look for work, or attend school full-time
Because these expenses often increase or change at the start of the school year, fall is a natural opportunity to remind employees that eligible expenses may qualify for reimbursement through their dependent care FSA.
It's also a good opportunity to reinforce how the benefit works. For example, employees may not realize that while preschool and nursery school expenses are generally eligible, private school tuition is not. Others may be surprised to learn that dependent care FSA claims can only be reimbursed after care has been provided, even if the expense was paid in advance. Employees who use a nanny or other caregiver may also benefit from reminders about the information required to submit eligible expenses for reimbursement.
Fall Is Also a Good Time to Start Thinking About Open Enrollment
Back-to-school season often gives employees a clearer picture of their dependent care needs for the months ahead. As families adjust to new childcare arrangements, after-school programs, preschool schedules, and school break care, they may have a better sense of what they'll spend on eligible dependent care expenses in the coming year.
That makes fall an ideal time for employees to evaluate whether their current dependent care FSA election aligns with their anticipated expenses and whether they should increase or decrease their election during the upcoming open enrollment period.
There's another reason to start the conversation now: recent legislation increased the annual dependent care FSA contribution limit from $5,000 to $7,500 ($3,750 for married individuals filing separately), marking the first permanent increase to the limit in decades and giving some employees the opportunity to set aside more pre-tax dollars for eligible dependent care expenses if their employer adopts the higher limit.
As open enrollment approaches, HR teams can encourage employees to review their childcare expenses and consider whether their upcoming election should be adjusted based on their family's expected needs.
Whether you're reminding employees about eligible expenses, addressing common misconceptions, or encouraging them to think ahead to open enrollment, a timely communication can help increase awareness of this valuable benefit. Use the sample email below as a starting point for your fall outreach.
Or copy and customize the text below
Sample Employee Email
Subject: New School Year? Don't Forget About Your Dependent Care FSA
As the new school year gets underway, now is a great time to review your dependent care flexible spending account (FSA) and make sure that you're fully taking advantage of these funds.
If you're paying for eligible dependent care expenses so that you can work, look for work, or attend school full time, you may be able to use your dependent care FSA to help reduce your out-of-pocket costs through pre-tax savings.
Common eligible expenses may include:
- Before-school care
- After-school programs
- Preschool or nursery school
- Eligible childcare providers
- Certain day camps during school breaks
If you've recently enrolled your child in a new program or your childcare needs have changed, take a moment to review your dependent care FSA benefits.
Next Steps:
- Check your account balance
- Save documentation for eligible expenses
- Submit reimbursement requests according to your plan guidelines
- Contact your HR team if you have questions
Make the most of your benefits this school year!
One Simple Reminder Can Go a Long Way
A back-to-school reminder can do more than encourage current participants to use their dependent care FSA. It can also help employees make more informed benefit elections during open enrollment by connecting their real-world childcare expenses to the value of the benefit.
By including seasonal reminders in your benefits communication strategy, HR teams can increase awareness, encourage participation, and help employees get greater value from their benefits throughout the year. With dependent care costs continuing to rise and contribution limits increasing, now is an ideal time to put dependent care FSAs back on employees' radar.
EBC clients can take advantage of additional participant communication resources through our enrollment toolkits. These ready-to-use materials, including seasonal benefits reminders and enrollment communications, are available in your online account.