Child care FSA

[Mushe]

Did your employers choose to implement the 2021 increased limit from $5k to $10,500? We usually use my husband’s plan, because my employer has an antiquated payroll system and I’ve been told the process to claim is annoying. However, they keep dragging out whether they’ll increase, and my employer allowed a one time enrollment or increase due to ARPA, so I enrolled for $5,500.

Anyone in the same boat? I was nervous whether it would work, but it looks like there’s no prohibition on splitting the contribution, as long as you don’t exceed the max.

[Susie]

We still haven't gotten clear communication on it from either H's employer or mine. We would love to be able to increase to $10,500 though, and have asked.

[Pilsy]

My employer sent a notice that they will be increasing our limit to the new max, but that initial communication was just a heads-up and didn't include the details. I expect to receive more information this week or next.

[Deleted]

No but to be honest, I didn't enroll this year after leaving money on the table last year. And now I can't get a straight answer about whether or not they'll let us use last year's unspent dollars. But this is par for the course with them.

[Mushe]

May 4, 2021 20:30:13 GMT -5 @princessbubbleyum said:

No but to be honest, I didn't enroll this year after leaving money on the table last year. And now I can't get a straight answer about whether or not they'll let us use last year's unspent dollars. But this is par for the course with them.

Ugh, I’m sorry! FWIW, I think that’s part of ARPA, the ability to use leftover 2020 dollars.

We will unfortunately spend a lot more than the max, with a toddler.

[Mrs.flang]

I asked about it to our HR and they had no idea what I was talking about, but they eventually called our provider and set it up. I don't think H's work offers it. I'm not looking forward to the huge hit to my paycheck, but its supposed to start coming out 5/15. They also told me I may not qualify for all of it as a highly compensated employee, but for the life of me I can't figure out how that calculation works and if I would even come close to being HCE.

I don't think it will matter in your case if its split between spouses.

[shortstax]

When I asked my HR told me I'm the only one who uses it. It solidified my feelings that policies are made at our small firm without consideration of working parents in mind.

[Pilsy]

May 4, 2021 18:39:10 GMT -5 Pilsy said:

My employer sent a notice that they will be increasing our limit to the new max, but that initial communication was just a heads-up and didn't include the details. I expect to receive more information this week or next.

Just received the email with more details, including two ways to sign up. 

I hope more of you end up with access to the additional tax benefit!!  

[k3am]

I emailed HR about it last month with no response.. thanks for the reminder.

[definitelyO]

our company did not increase. We have less than 1% participation rate and increasing would probably cause us to fail non-discrimination testing and have to lower highly comped contributions anyway.

[Mushe]

Holy cow, it makes me sad that the utilization rate is so low. I know it can get confusing to do the math between which method of claiming is better, but eesh. I guess there’s a barrier to entry in terms of having to request reimbursement too. We’ve always claimed reimbursement once a year and used that for 529 contributions, but I know that’s a luxury.

[cherry1111]

No. I opened a ticket with HR and they said no.

[sent]

This is the first I've heard of this. Is this something I have to choose now or was supposed to choose back in November during open enrollment? I'm pretty sure we are at the $5K but would love to see it double. I'll be on the hook for over 10K in childcare for at least 3 more years.

[tcu2003]

I asked my company, and the response I got was that they researched, weighed their options, and decided not to proceed with adopting the amendment. 😞

[ohgillian]

May 5, 2021 21:58:57 GMT -5 tcu2003 said:

I asked my company, and the response I got was that they researched, weighed their options, and decided not to proceed with adopting the amendment. 😞

This is so weird to me -- it's like employers don't understand that they save their share of FICA when you put money into the flex. They should want it as high as possible. [In addition to, you know, supporting their employees.]

[Mushe]

May 5, 2021 21:06:13 GMT -5 sent said:

This is the first I've heard of this. Is this something I have to choose now or was supposed to choose back in November during open enrollment? I'm pretty sure we are at the $5K but would love to see it double. I'll be on the hook for over 10K in childcare for at least 3 more years.

Nope, it just passed into law as a one year expansion of the limit, for 2021, with the American Rescue Plan Act. Employers had to decide whether to implement it, though. Mine had a special period to make changes, and they considered enrollment a change so I got in.

[k3am]

My HR has been radio silent. I wish they'd just respond and say "no, we're not doing it" and be done with it.. I didn't even realize it was an option for them, but any answer is better than an email into a blackhole.

[brooke77]

Nope. Neither my nor my H’s employer. We would def have used it.

[winemaker06]

My husband's employer is offering it. HOWEVER, their plan year is May - April. And their system only lets you contribute up to the maximum / 12 (monthly pay). So as of May 1, he signed up for the maximum $875/month to hit the $10,500 cap in a year.
Then I found out that since this is a temporary limit increase at this time, companies may be required to decrease withdrawals in January 2022 to reflect the maximum at that time. So husband asked if he can withdraw more, so he can hit the $10,500 in calendar year 2021. And the response was basically, "We don't think so" because the system doesn't allow them to do it.

But this is why this part of ARPA was passed so... I'm annoyed. Very annoyed.
And only just thought about maybe signing up with my company for the remaining amount. "Change in childcare costs" is a qualifying life event that lets you make changes.

[simpsongal]

I'm a fed, and they're implementing. But DH carries the DCFSA (for OASDI income purposes) so we're waiting to see if his employer will up the amount. If not, I'll apply through my employer.

[lessel]

May 10, 2021 9:31:55 GMT -5 simpsongal said:

I'm a fed, and they're implementing. But DH carries the DCFSA (for OASDI income purposes) so we're waiting to see if his employer will up the amount. If not, I'll apply through my employer.

Fed here too. I had to submit a "qualifying event" to make the change. I was feeling a little SOL on that front, but our daycare costs went up in recently and that was considered a qualifying event ("increase in dependent care expenses"). I called the FSAFEDS folks and they walked me through making the changes online.

[shaynaatl]

I had no idea this increase was a thing. Our megacorp is sticking to $5,000. This is surprising because our benefits are normally very employee-friendly.

[gt7301b]

May 10, 2021 9:52:01 GMT -5 lessel said:

May 10, 2021 9:31:55 GMT -5 simpsongal said:

I'm a fed, and they're implementing. But DH carries the DCFSA (for OASDI income purposes) so we're waiting to see if his employer will up the amount. If not, I'll apply through my employer.

Fed here too. I had to submit a "qualifying event" to make the change. I was feeling a little SOL on that front, but our daycare costs went up in recently and that was considered a qualifying event ("increase in dependent care expenses"). I called the FSAFEDS folks and they walked me through making the changes online.

How did you account for past contributions?  When I go though the process of a qualifying event it gives me a new amount that is spread out over 16 weeks, but I already have made 10 weeks of contributions.

[lessel]

May 11, 2021 10:57:37 GMT -5 gt7301b said:

May 10, 2021 9:52:01 GMT -5 lessel said:

Fed here too. I had to submit a "qualifying event" to make the change. I was feeling a little SOL on that front, but our daycare costs went up in recently and that was considered a qualifying event ("increase in dependent care expenses"). I called the FSAFEDS folks and they walked me through making the changes online.

How did you account for past contributions?  When I go though the process of a qualifying event it gives me a new amount that is spread out over 16 weeks, but I already have made 10 weeks of contributions.

Hmm. I'm not sure I paid close enough attention. It just increased the amount withheld from future paychecks. I always have mine set up to deduct an amount through like October, because I hate fussing with it at the end of the year. But now it'll go through the end of the year and the amount increases. So like, I think it was in the ballpark of something like $250 per paycheck through October originally and now it's $500 per paycheck through the last pay period in Dec. 

*I think*

[mlkgls]

My benefits department replied today and said corporate decided against raising the limit this year. I’m not surprised at the response given we hadn’t heard anything about the change, but it grates. We’re part of a huge health system with a predominantly female workforce that might have benefited from the change. That and the response said they were sticking with the $2750 limit. 🧐

[gt7301b]

May 11, 2021 11:41:11 GMT -5 lessel said:

May 11, 2021 10:57:37 GMT -5 gt7301b said:

How did you account for past contributions?  When I go though the process of a qualifying event it gives me a new amount that is spread out over 16 weeks, but I already have made 10 weeks of contributions.

Hmm. I'm not sure I paid close enough attention. It just increased the amount withheld from future paychecks. I always have mine set up to deduct an amount through like October, because I hate fussing with it at the end of the year. But now it'll go through the end of the year and the amount increases. So like, I think it was in the ballpark of something like $250 per paycheck through October originally and now it's $500 per paycheck through the last pay period in Dec. 

*I think*

Thanks!  I called them and the Customer Service rep said they prorate based on what was already contributed, so hopefully it will all workout.