Dependent Care Flexible Spending Account
What Does Dependent Care Flexible Spending Account Mean?
A dependent care account is like a health savings account that, instead, pays for care services like preschool, after school programs, and childcare.
Insuranceopedia Explains Dependent Care Flexible Spending Account
A dependent care account is a type of flexible spending account. It is similar to health savings accounts (HSAs) and health reimbursement accounts (HRAs). Unlike HSAs and HRAs, however, dependent care accounts are commonly offered with more traditional health plans. Moreover, the funds in a dependent care account are not lost when the plan year is over.
A dependent care account can be used for a child under or at the age of 12 or a disabled dependent. There is no age limitation for disabled children.
As of 2015, these accounts have a $5,000 cap. The money an individual contributes to the account, moreover, is not taxable.