Last week, H.R. 750, the “Family Care Savings Act” was introduced in the U.S. House of Representatives. This legislation will make improvements to dependent care flexible spending accounts (FSAs) and help Americans manage the rising costs of raising a family. ATR endorses this bill and urges members of the House to support this legislation.
H.R. 750, introduced by Representative Patrick McHenry (R- N.C.) and Representative Grace Meng (D- N.Y.) raises the cap on dependent care FSAs from $5,000 to $10,000 and indexes it to inflation after the first year of enactment. These FSAs allow employees to save part of their pre-tax earnings for specific expenses including medical and dependent care. Dependent care FSAs can be used for children under the age of 13, anyone who is physically or mentally unable to care for themselves, or any adult whose care is predominantly paid for by another person.
This legislation will provide a much needed update by increasing the current cap which was set almost 30 years ago when dependent care FSAs were first created in 1986. H.R. 750 will improve dependent care FSAs and help families plan and budget for the expenses of caring for children, disabled spouses, or elderly parents.