Childcare "Holding Fees"

[Guest susanyb]

An employee has a child with severe medical problems. There have been times where the child is absent from the day care for up to 4 weeks due to illness. The day care is requiring the family pay for this missed time and calling it a fee to hold the child's space.

Is this reimbursable under a Dependent Care Reimbursement Account?

[Lisa Hand]

Other providers call it a Reservation fee. However, basically it does not represent custodial care, since the child was not at the facility during those periods, so it is not a valid dependent care expense.

One additional question, where is the child when he/she is not at the daycare facility? Hospital? or in some other type of facility? At home, being cared for there by a family member? Depending on the answers, there may be other custodial care expenses or the participant may have a valid change of status to lower their allocation, since a change in cost or coverage applies to dependent care.