Eligibility of a Dependent Care Expense

[Guest Gail Maloney]

Just trying to verify an eligible expense for dependent care reimbursement. If a dependent care expense is incurred and paid in a claim year but it covers a period of time that extends beyond the plan year - is the entire amount eligible for reimbursement under the dependent FSA? Our thought is yes - since it was incurred and paid within the claim year - but we'd like to verify this. Anyone???

Thanks.

[Lisa Hand]

Expenses are not considered "incurred" until the service is rendered. As with all expenses in Section 125 plans, it is not incurred "when it is formally billed, charged or paid" but rather when the service is given.

If the actual service did not take place in the plan year, it is not a valid expense.