Child Care Resources

Child Care for kids can cause financial stress for many families. It has happened to us all. The “sticker shock”, when you find out just how much child care will cost for your infant or toddler. Full or even part-time daycare can run upwards of a thousand dollars or more in some cases. For parents who have little choice, this can be a big financial strain. According to one recently conducted poll, over 70% of parents say family daycare represents a somewhat serious, to a very serious financial burden for their household.


Child Care Resources Cost (Graph)

Dependent Care FSA’s are an amazing child care resource

One way to combat the high cost of childcare is to take advantage of tax savings by enrolling in a Dependent Care FSA through your employer. Contributions to Dependent Care FSA’s are withheld from your paycheck before taxes. This saves the average person making $50,000 about 35% in total cost. If someone paid $5,000 in childcare costs, they would save an estimated $1,750 annually by contributing to a Dependent Care FSA.

Dependent Care FSA’s were initially created in 1981. They have been hamstrung by low funding limits and cumbersome funding rules and requirements. Because of this, participation in Dependent Care FSA’s remains very low, somewhere around 3%, according to Aon Hewitt, a large benefits consulting firm.

Insurance Savings Group (ISG) is taking a fresh look at Dependent Care FSA’s. We have revived this old plan with some new features.

The ISG Dependent Care FSA and how it differs from other plans

  • ISG allows you to pay your annual dependent care expenses immediately starting the first day of the plan, saving you an additional 5% at participating preschool providers.
  • We allow you to take full advantage of monthly pre-tax payroll deductions which save you an average of 35% on income and payroll taxes.
  • The plan keeps things simple by using a debit card to pay for dependent care expenses.

A unique feature in ISG’s agreement allows our members to enjoy the simplicity of having to make only one payment. In the original plans (dependent care FSA’s through your employer), one comes from your payroll check and the other to your provider to get reimbursed.

ISG has also modified other older unimproved accounts such as Flexible Spending Accounts (FSA) and Health Reimbursement Arrangements (HRA). These accounts can help pay for out of pocket medical, dental, and vision expenses. Are you are having trouble paying for your families dependent care accounts? Or are having trouble covering out of pocket medical, dental, and vision expenses? Consider contacting ISG through our website to see if you could benefit from joining the savings group.