How a Dependent Care Plan Can Help with the Cost of Summertime Childcare

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Summer is an exciting, albeit overwhelming, time of year for most families. The weather is warm, kids are out of school and working parents may require more PTO than any other time of year. Employers can offer specific benefits to make this hectic time of year easier for their employees as well as themselves.

That's where dependent care plans come in.

Why It’s Important

Dependent care plans allow employees to provide their families with the best care possible while they’re at work. This becomes especially important during summer break because working parents aren’t always available to take care of their children. Without school to fill every weekday during the summer months, childcare expenses skyrocket.

A dependent care plan is vital to helping working parents save money. Employees can use pre-tax dollars to pay for things like daycare, daytime nannies, and even summer camp for older children. Currently, employees can elect to use up to $5,000 annually.

This type of plan allows parents to provide safe and exciting entertainment for their children during the summer months, as well as the rest of the year.

How Employees Get Paid

As is the case with many employee benefits, dependent care plans can take some getting used to . However, Clarity offers three simple ways for employees to claim their dependent care savings. Employees can take a photo of their receipt and submit a web claim from just about anywhere using the Clarity Mobile app. They can also set up providers with automated direct payments to eliminate receipts and any other ancillary paperwork. Lastly, they have the option to use our smart debit card to pay for eligible expenses

It helps to have easy, instant claim options – like debit cards, pay-to-provider, and our mobile app.  Still, to be safe, employees should keep all receipts and records pertaining to their child care expenses each year. It helps to note the name, address and Social Security number or employer identification number of the care provider so it can be reported when they claim the credit on their tax returns. Clarity can help employees “shoebox” these receipts for future reference as well.

Educate Your Employees

In order to utilize dependent care funds properly, employees have to understand the stipulations involved. For example, day camps are included, but sleepover camps are not. Expenses for care must be work-related, and children generally have to be 13 or under to qualify.  It's imperative to explain what qualifies as a "work-related expense" and what does not, especially when filing a joint return.

It is the employer’s job to ensure employees understand the specific rules so they can get the most out of their dependent care plan. Spend the time to educate employees during the onboarding process or after a life change event so they can receive the most savings possible.

To simplify the entire process, Clarity offers a claim filing system, customer support, an innovative consumer benefit enrollment platform and a Clarity Consumer Benefits Card to give employees easy access to all Clarity accounts.  

How Dependent Care Plans Benefit Employers

By helping to make reliable childcare available, employers can decrease the number of unplanned PTO days employees might otherwise require during the summer.

Offering a dependent care plan and educating your employees about how it works, shows how much you care about the health and happiness of employees’ families, which in turn makes employees happier and more productive, and helps increase loyalty long-term.

Clarity’s Dependent Care offering allows employees to take better care of their family members by providing access to pre-tax money for child and adult care expenses. Clarity’s mobile app makes web claims easier than ever, and our customer support team can clarify any questions that pop up along the way. Visit our website to learn more about our Dependent Care offering and how it can benefit your employees’ families!