Frum.Finance

TIL if I submit a claim to my dependent care FSA that exceeds the amount in my balance, they'll keep doing direct deposit into my personal bank account for any new contributions until the claim is paid

Same with mine. If you put in a claim for 1k and only have $500 in the account, you get that $500 right away and the next time money is deposited into the account, it automatically deposits it into your bank account until the total 1k is reimbursed. I assume it's a normal feature for these types of things.

<@U04EQ1L14HG>

Dependent Care FSA doesn't work the same as Healthcare FSA.

With a healthcare FSA you have all the money available to you at the beginning of the year and the company deducts the money from your paycheck throughout the year. (Fun fact: If you leave the company and you have a remaining balance in the account you lose it. I*f you leave and you've used more than has currently been deducted the company is not allowed to deduct the remainder. I had a company that tried to do that because I used it all up since I knew I was leaving. Its illegal.*)

With dependent care FSA you can only use money that has already been deducted, so as the year progresses, the balance increases. So if you pay a babysitter $6,000 for 10 months you'll be paying them $600/mo and have 2 months with no payment. However the FSA is deducted on a 12 month basis ($500/mo).

When you then put in a claim for $600 for a month, the FSA will only reimburse $500 since that was what was deducted from your paycheck for that month. The next month they would reimburse the remaining $100 and if you make another $600 claim they would use the remaining $400 towards that claim and so on.

I wish my company had a medical FSA... I miss that feature.

Yup, I align my tuition payments so I have a $5k payment near the beginning of the calendar year for early childhood. I submit one claim and I get a $208.33 direct deposit a few days after every paycheck for the rest of the year.