#256 – Open Enrollment Revisited: Maximizing Employee Benefits for Families

Hey, money bosses Anna's here, and welcome back to the Money Boss Parent podcast. It is that time of the year where we get to talk about what benefits should you be paying attention, especially during the open enrollment season, as you're gearing up to get started on your next calendar year. Today, I want to cover a few different options that parents should be thinking about for next year. Now I know that we typically talk about the most common benefits, such as life insurance, health insurance, vision and dental, and you work through those and make sure that your choices are what you think they're going to be. Today, I want to cover some of the some of the options that may or may not be available to you. Yet my goal here is to stimulate some thoughts where you would be looking for ways to utilize those benefits. Now, for those of you who are not employed or do not have elaborate employee benefits package, would still be able to get access to some of these benefits on your own, and I'll make sure that I touch on those as well. I'm also excited to share with you a few of interesting facts about these benefits. The first item I want to cover is called dependent care assistance. This is the type of benefit that is available to you through your what's called FSA flexible savings account. It's an account that allows you to put pre tax monies from your paycheck to cover qualified child care expenses. And there's a laundry list of expenses that we can pay that are going to be constituted as a qualified child care expense. And the reason it needs to fall into that that category, because IRS has a laundry list of items that they will allow you to pay for from this account. So here are a few examples, nursery school, preschool or equivalent care program for children below kindergarten level. This is actually interesting, because I didn't know that kindergarten sort of has that threshold. So, for example, Liam is going to be going to kindergarten next year, and we're trying to decide if we're going to keep him in the private call it private kindergarten, but it's a kindergarten that is available at his preschool, which is like $16,000 a year in tuition if we stay there or we're going to go to public school, and it is free, so kind of keep that in mind. I don't know if that's the same, probably the same for other states, and we're in California. So the next item is preschool or after school care. So if you have those options, and I know we have friends who have kids that are in kindergarten, but then they need extended care. So after school care is something that you can cover from your dependent care. FSA, you can also pay a provider who watches your dependent kids outside of your home, like a neighbor, right? So if you have someone you're paying to watch or babysit, you can pay for those expenses. You can pay directly to the day camp. So if they go to the day camp, a lot of those day camps were popular during summer, and you can also pay for certain fees or deposits and application fees that you are spending to provide or to apply for for these services, also the actual dependent care center, if it's not a preschool, if it's not a kindergarten, it's the actual, you know, school, slash dependent care center that you can pay for now, here are some examples of what doesn't qualify for you to use these dollars for child support payments. So alimony, you can have pay alimony from this account. The interesting part for this particular angle is because if you pay alimony, or if you could pay alimony from this account, you're already getting a benefits of tax deduction and to generally, alimony payments have tax benefits themselves, so that that's one reason summer school tutoring. So for example, Reem goes to Kumon after school twice a week. So I can't pay for Kumon because it constitutes two rings. So he takes math and English classes sleep away camps. Oh boy, those are, of course, are like more expensive types of camps, and parents are always looking for ways to pay for. Those food, lodging, closing, education, entertainment, are not eligible expenses for you to use funds from your dependent care account. For example, if you're married, each of you can put $2,500 into this account from your employees, respectively, or total for $5,000 per household.