The BASE® Dependent Care Assistance Plan, also known as a Dependent Care FSA, is a plan established by an employer that allows employees to set aside money from each paycheck, on a pre-tax basis, to pay for qualifying dependent care. This money can help for qualifying dependent care expenses such as daycare, preschool, and before and after-school care...
...But did you know that it also helps to pay for elder care?
By the year 2040 (that's only 23 years from now) the percentage of people aged 65 and older will have nearly doubled to 22%, up from 13% in 2010. Yet, the past few years has seen little growth in the number of employers offering benefits for employers who care for older and disabled relatives (Innovative Employers Enhance Caregiver Benefits).
In a study by ReACT, a coalition of more than 40 companies and non-profits dedicated to addressing the challenges faced by employee caregivers and reducing the impact on their employers, on Emory University in Atlanta, revealed that 15% of respondents were currently taking care of an adult family member.
"Nearly 60% of those people expressed concern about managing the care of an adult loved one in the next one to three years," explains Audrey Adelson, Emory's manager of work-life. (Innovative Employers Enhance Caregiver Benefits).
Do you, or your clients, know that by implementing this BASE® 125 Cafeteria Plan into their business, their employees will not have worry about the costs of taking care of their mother, father, or spouse?
Dependent care to many employees or employers equates to daycare, so how can it be used for elder care? Keep reading!
Who is eligible to use DCAP for elder care?
- A participant must be at work during the time the eligible dependent receives care
- Participants must have a spouse, or a dependent parent who is physically or mentally unable to provide for his/her own care
Who is considered an eligible senior dependent for reimbursement?
- Your spouse, or a dependent parent, who is mentally or physically incapable of caring for himself/herself and who lives with the participant for more than half of the year
What kind of care is eligible for reimbursement?
- Inside or outside the home by anyone other than the member's spouse
- In a dependent care facility which meets all applicable state and local regulations
- By a housekeeper whose services include, in part, providing care for a qualifying individual
No matter what the company, or size, the Dependent Care Assistance Plan is a reality. The employer is able to offer an enhanced benefits package that can help with recruitment and retention of employees, and financial benefits from the reduction of the employer's share on payroll taxes. The employee gets the peace of mind they deserve; continuing to work and establishing funds to help pay for the cost of dependent care. Since these funds are transferred on a pre-tax basis, the employee is able to increase their take-home pay.
Contact BASE® today to learn more about this and other money saving benefit strategies by visiting our website or calling 1-888-386-9680.