Bill Overview
Title: WFCA Act of 2022
Description: This bill allows certain additional expenses to be paid from a dependent care flexible spending arrangement (FSA), specifically qualified sports, tutoring, and music or art expenses. It also increases the eligibility age for dependent care benefits to 15, allows a carryforward of unused benefits to the next plan year, and increases to $15,000 the maximum amount of dependent care benefits excludible from employee gross income.
Sponsors: Rep. Miller, Carol D. [R-WV-3]
Target Audience
Population: Working families with dependent children
Estimated Size: 44000000
- The bill is designed to enhance the financial flexibility of working families by easing childcare-related expenses.
- Dependent care FSAs primarily benefit working parents or guardians who have dependent children.
- By including sports, tutoring, and arts expenses, the bill aids families who invest in extracurricular activities for their children.
- The increase in eligibility age to 15 impacts families with older children, specifically those between ages 13-15, who were previously ineligible.
- The increase to $15,000 in dependent care benefits can significantly affect middle-class and higher income families who have the resources to take full advantage of this exclusion.
- The carryforward feature benefits those who have variable childcare expenses or whose expenses fluctuate from year to year.
Reasoning
- The policy is likely to benefit working families with dependent children, particularly those who utilize dependent care FSAs.
- Given the budget constraints and target population, around 14 million families are anticipated to benefit, impacting a wide demographic across income levels.
- The ability to carry over unused benefits allows families to better manage fluctuating expenses, providing additional flexibility.
- Increasing the eligibility age to 15 helps families with older children who are still dependent.
- The enhanced benefits to cover activities like sports and arts may particularly impact middle- to higher-income families who can afford these activities.
- Families with stable or predictable childcare costs, or those not using FSAs, may experience limited direct impact from this policy.
- Budgetary constraints mean not all eligible families will benefit simultaneously, and the policy's impact will vary based on individual family circumstances.
Simulated Interviews
Software Engineer (San Francisco, CA)
Age: 34 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- I'm pleased the eligibility age increased; now I can include my 14-year-old.
- Including tutoring and sports expenses in the FSA is a relief, our budget always struggles with extracurriculars.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Public School Teacher (Austin, TX)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- The policy sounds beneficial, but I'm not using FSAs and it's not clear if this will help me.
- It's good to know there's a carry forward option now; maybe I'll look into it.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Marketing Manager (New York, NY)
Age: 29 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- I've been waiting for something like this; now, I can budget better for my child's activities.
- The increased limit is fantastic, but I wish there was more information on how to manage carry forwards effectively.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 10 | 8 |
| Year 20 | 8 | 7 |
Factory Worker (Detroit, MI)
Age: 37 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 14/20
Statement of Opinion:
- I might start using more FSA benefits now, particularly with the carryforward option.
- It's not something I understood fully, so perhaps some educational workshops might help.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
Nurse (Chicago, IL)
Age: 50 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 13/20
Statement of Opinion:
- The inclusion of older children is a relief for me as I've been managing a lot of expenses alone now.
- I see potential benefits, but initial setup seems complex without guidance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Entrepreneur (Phoenix, AZ)
Age: 32 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 8/20
Statement of Opinion:
- This might incentive starting some additional side activities due to tax savings.
- We invest a lot in our child's activities, so this could help indirectly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Graphic Designer (Miami, FL)
Age: 27 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 20/20
Statement of Opinion:
- I don't have children, so this policy doesn't impact me directly.
- It's great for those who do; perhaps someday I'll benefit from this.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 6 | 6 |
| Year 20 | 5 | 5 |
University Professor (Seattle, WA)
Age: 38 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 8.0 years
Commonness: 10/20
Statement of Opinion:
- I believe this will make a significant difference, particularly if expenses increase with teenage years.
- This aligns well with future plans for my child's extracurricular growth.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 8 | 7 |
Retail Worker (Atlanta, GA)
Age: 43 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 12/20
Statement of Opinion:
- The policy sounds useful but I doubt I'll see the benefits first hand with my current income.
- Perhaps financial support in setting up these accounts could help more.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Financial Analyst (Boston, MA)
Age: 36 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- This is fantastic news for us as it expands what we can cover conveniently.
- I've always believed in planning early, so increasing age eligibility aligns perfectly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 10 | 8 |
| Year 20 | 9 | 7 |
Cost Estimates
Year 1: $3500000000 (Low: $3000000000, High: $4000000000)
Year 2: $3600000000 (Low: $3100000000, High: $4100000000)
Year 3: $3700000000 (Low: $3200000000, High: $4200000000)
Year 5: $3800000000 (Low: $3300000000, High: $4300000000)
Year 10: $3900000000 (Low: $3400000000, High: $4400000000)
Year 100: $4000000000 (Low: $3500000000, High: $4500000000)
Key Considerations
- The eligibility expansion might lead to increased short-term utilization but gradually balance out as families adjust contributions.
- Broader inclusion of expenses in FSAs encourages more holistic child development support beyond basic childcare.
- Tax exclusions might skew towards families with higher incomes who can afford to max out the benefit cap.