Covering the Kids

Open season for the Federal Employees Health Benefits Program is just days away and from Nov. 8 to Dec. 13 participants will be able alter or cancel their health, dental, vision and flexible spending account elections without penalty. In addition to exploring changes in health insurance coverage, federal employees with kids might want to consider the benefits available for child and dependent care.

Government workers have several resources to assist with dependent care. Flexible spending accounts, elected during open season, allow participants to make pretax contributions to a savings account to pay for medical and dependent care. Contributions do not roll over at the end of the year, so enrollees must spend the entire account balance, or lose it. The program does have a two-and-a-half-month grace period for employees to spend money left over from the previous year, however.

While the government also offers flexible spending accounts to cover health care costs, the dependent care flexible spending account pays for child care or adult dependent care expenses that are necessary to allow an employee and his or her spouse to work, look for work, or attend school full time. Participants can contribute $250 to $5,000 per household annually, minus any other child care subsidy.

For federal employees with dependent children under age 13, or a dependent of any age who is mentally or physically incapable of self-care, a DCFSA can help pay for summer day camp, after-school care, or baby-sitting, along with an adult dependent's day care or a housekeeper whose duties include caring for an eligible dependent. It does not cover medical care, tuition, field trips, or transportation, however, nor will it reimburse expenses if participants have no income in that year. For adult dependents such as grandparents or disabled children to qualify, DCFSA enrollees must provide at least half the person's care for the year.

Retirees and active-duty military members are not eligible to contribute to the program and not all federal agencies offer an FSA option.

In addition to allowing workers to set aside pretax money for out-of-pocket expenses, federal agencies offer funding to assist lower-income employees with child care costs. The subsidy program applies to those whose children are under age 13, or disabled and younger than 18, and are enrolled, or will be enrolled, in licensed family child care homes or center-based child care. To be eligible, employees' income must fall below the cap their agency set. The General Services Administration maintains a list of child care centers operating on-site in its buildings.

Military personnel also qualify for child care tuition subsidies through the GSA and U.S. Army Partnership for Affordable Care, the U.S. Coast Guard Child Care Subsidy Program, and National Association of Child Care Resource and Referral Agencies Military Partnerships. Additionally, the Defense Department manages 800 facilities on installations worldwide and in July announced changes to its fee structure to better balance the incomes and expenses of service members.