FlexRight Dependent Care Account
This benefit is often offered along with the FlexRight MedFlex Account, but allows participants to pay for qualified dependent care expenses pre-tax. The dependent care expense must be for the purpose of allowing a parent to work and is limited to $5000 ($2500 if married, filing separately) or the annual income of the lowest paid working parent. You may pay your dependent care provider using the FlexRight Benefits Card, have us send a check directly to your dependent care provider or pay them by cash or check and file for reimbursement using our convenient online (or paper) claim forms.
Which dependents qualify?
- Dependent children who are under age 13 and mentally or physically handicapped dependents of any age
- Elderly dependents
What expenses are covered?
- Day care
- Nursery school
- Before and after school care
- Eldercare
What expenses are not covered?
- Expenses over the annual cap.
- Expenses paid to a non-qualified provider
- Expenses for overnight camps
How does the plan work?
- Before the plan year begins, employees decide how much they want to contribute to the account, up to the maximum allowed, or if there is a change in status.
- Employees may contribute up to the $5,000 annual maximum. $2,500 if married, but file separate tax returns. Contributions may not exceed the taxable compensation of the lowest paid working spouse. A spouse that is mentally or physically impaired or a full-time student shall be deemed to have an earned income of $250 per month (for one eligible dependent) or $500 per month (for two or more eligible dependents).
- Contributions are automatically deducted from employee's pay on a pre-tax basis.
- The employee pays the provider using the FlexRight MBI Benefits Card™ , or pays with personal funds and files a request for reimbursement. Reimbursements may be filed either online, for faster service, or by paper form.
- Unlike the MedFlex Account, funds are available only as money is contributed.
- Employees can not transfer money between their health and dependent care accounts.
- Only expenses actually incurred during the plan year qualify for reimbursement. However, employees may submit expenses up to 45 days after the close of plan year.
Dependent Care Accounts are governed by Federal Law. There are certain requirements you'll need to understand before you decide to offer an FlexRight Dependent Care plan.