Meng and McHenry Introduce H.R. 750, the Family Care Savings Act

Today, Chief Deputy Whip Patrick McHenry (R-NC) joined with Congresswoman Grace Meng (D-NY) to announce the introduction of H.R. 750, the Family Care Savings Act. H.R. 750 raises the cap on dependent care flexible spending accounts from $5,000 to $10,000 and indexes the cap amount to inflation.

"Over the past thirty years, costs have risen drastically for American families with the cost of childcare being no different," said Congressman McHenry. "As a first-time father I have gained a new appreciation for the significant expenses parents face when raising children. This change is a common sense reform to better address the budget realities faced by so many American families."

"As the mother of two young children, I can attest firsthand to the staggering costs of child care," said Congresswoman Meng. "It is essential that we help parents deal with these types of rising expenses, and raising the cap on this kind of flexible spending account is an easy and common sense way to do it. I urge my colleagues in Congress – many of whom are parents or grandparents themselves – to pass this important piece of legislation."

The dependent care FSA was originally created as part of the Tax Reform Act of 1986 and is designed to help American families plan and budget by using pretax dollars to pay for expenses related to the care of children, disabled spouses, or elderly parents. The current cap of $5,000 was originally set in 1986. It applies to children under the age of 13, anyone who is physically or mentally unable to care for themselves, and any adult whose care is predominantly paid for by another person. Minimum and maximum contribution amounts to dependent care FSAs are set by employers.

Flexible spending accounts (FSA) are a savings vehicle established as part of employer-sponsored health insurance plans. They allow employees to save a share of their earnings for qualifying expenses which typically include medical or dependent care. The money is pretax dollars deducted directly from employee's paychecks.