Dependent Care Assistance Plan and Leaves of Absence

[Guest M L Sullivan]

I have an employee who is going out on maternity leave sometime next March. We are in our benefits open enrollment period right now. She had some questions regarding the Dependent Care Assistance Plan (FSA) due to her leave of absence. I told her that while she was on leave, she could not take advantage of the DCAP plan because the regs state that in order to use the plan, you have to be working. So her deductions will stop. I know that when she returns from leave (it will be FMLA) she can reinstate her benefits.

I have a couple of things I want to ensure I am thinking correctly on:

1. I told the employee to go ahead and make her annual DCAP election for the entire 2002 year (e.g. for her, it's $4800).

2. When she returns from leave, I believe she can change this election due to her family status change (e.g., she may not need $4800 for the year but maybe only $3000 now or maybe $5000 with the new baby).

Please advise.

[Guest Testrella]

A couple of things came to mind...does her husband's employer offer FSA and if so would it be easier to manage if he enrolled in the FSA this year instead of her. They can still increase or decrease their contribution if they need to when she takes her LOA or once the baby is born.