Adult Daycare: HSA Eligibility

Adult day care reimbursement is not eligible with a flexible spending account (FSA), health savings account (HSA), a health reimbursement arrangement (HRA) or a limited care flexible spending account (LCFSA). Adult day care may qualify under a dependent care flexible spending account (DCFSA) when the adult is dependent on the account holder.

What is Adult Day Care?

Adult day care is designed to give caregivers the ability to take care of other obligations (work, school, etc.) throughout the day while the care recipient is kept in a safe, friendly environment. This differs from at-home care, as many adult day care providers operate brick-and-mortar centers where adult dependents will be cared for. Typically, adult day care centers have three main focuses: those that provide medical care, specialize in promoting social interaction, or those that focus on care for patients with Alzheimer's disease. A wide variety of activities, care services and health monitoring is available to give at-home caregivers peace of mind that their dependents are safe.

According to the National Adult Day Care Association (NADA), there are currently more than 4,600 adult day care centers throughout the U.S., and the NADA guidelines state that each center maintains a 6:1 patient to staff member ratio. While staffing varies between centers, typically they feature social workers, activity staff, program assistants, nurses, directors and support staff.

When is adult day care reimbursement eligible?

Adult day care is eligible for reimbursement with a dependent care flexible spending account (DCFSA) if the adult dependent is incapable of self-care and the expense allows the caregiver to work, look for work or go to school full-time. If an employee has a spouse that is a stay-at-home mother or father, he or she cannot participate in dependent care FSAs.

The minimum and maximum amounts allowed to be contributed to a DCFSA are set by the employer, and the maximum set forth by the IRS is $5,000 for individuals or married couples filing jointly, or $2,500 for a married person filing separately. As opposed to Healthcare FSAs, expenses can only be reimbursed under a DCFSA that fall within a current account balance, which may make it difficult to cover large claims early in a given fiscal year.

Eligibility Table

Flexible Spending Account (FSA) Limited Care FSA Dependent Care FSA Health Savings Account (HSA) Health Reimbursement Account (HRA)

Eligible

Eligible with Rx

Eligible with LMN

Not Eligible

Specifically Not Covered

Not eligible with an FSA, Limited FSA, HRA or HSA.

 


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