Many working parents find themselves struggling to make ends meet. As living costs rise, employers are looking for ways to help by offering additional benefit options. Let’s review four great benefit plans for working parents and how to maximize their usage.
Kids have so much energy and are very active, from playing in the backyard to joining sports teams – which means there are so many ways for them to experience cuts, scrapes, and other minor injuries. The good news here is that flexible spending accounts (FSAs) cover ‘boo-boo’ supplies, from bandages to antiseptic treatments. Plus, many retailers now offer same-day delivery services, making it easier and more convenient for parents to keep needed over-the-counter (OTC) supplies on hand.
If you have a high deductible health plan (HDHP) and a health savings account (HSA), you can’t have an FSA at the same time. But you may have a LIMITED PURPOSE flexible spending account (LPFSA). These accounts can be used only with dental and vision expenses, including braces and other orthodontia to straighten your kids’ wayward permanent teeth.
Parenting is a tough job, and all parents can be prone to burnout. This is likely more prevalent in working parents who are juggling a job, child-raising, and maybe even caring for an aging parent at the same time. Burnout at home can result in stress and fatigue in the office. In turn, stress and fatigue at work may bring down morale and reduce productivity. How can employers help before things get to that point?
Employee parents can be so busy caring for others that they forget to care for themselves. By providing a Lifestyle Spending Account (LSA), employers can encourage and help motivate their workers to make time for themselves, too. Employees can spend LSA funds on a variety of goods and services like sports memberships, day spa passes, entertainment streaming services, financial literacy courses, and much more.
According to Fortune, childcare costs rose 41% during the pandemic and now eat up 20% of the average family’s income. Employers can make a big impact by offering a dependent care flexible spending account (DCFSA or DCAP) to help employees reduce their tax burdens.
The DCFSA plan enables employee parents to set aside up to $5,000 of their gross income before calculating payroll taxes. These funds are used for childcare and preschool tuition expenses. Some plans even come with a debit card to avoid having to pay out of pocket first and then wait for reimbursement. Unlike the child care tax credit that you take on your tax return, a DCFSA plan reduces your Social Security and Medicare taxes as well as your income tax.
Employers, we hope you’ll help your employee parents help themselves by offering some or all of these benefit programs. Parents, be sure to maximize the value of these benefit plans to your family when they are made available to you.
Last but not least, Betty and I want to salute all you working parents out there. Being your benefits superheroes seems like an easy job in comparison!