288 research outputs found

    Making Dependent Care FSAa Work for Low- to Moderate-Income Families 5 Action Steps for Employers

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    Dependent Care Flexible Spending Accounts (DCFSAs) can help workers save money on child care expenses by using pre-tax dollars, but few employees actually use the accounts, particularly low- to moderate-income (LMI) employees, because: • DCFSAs are difficult to understand; figuring out if they are possible to use and worth the trouble is a complex task for families. • Families face a “double-hit” if they use the accounts – they have to set aside pre-tax dollars for child care expenses and then pay out-of-pocket before getting reimbursed. • Using a DCFSA may require certainty about a year’s worth of child care costs, with a possible penalty for over-estimating expenses (depending on each employers’ plan rules). • DCFSAs can interact with tax credits, Medicaid, and federal/state poverty alleviation programs

    Dependent Care FSAs: Policy Proposals to level the Playing Field for Low- to Moderate-Income Parents

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    This research was funded by the Annie E. Casey Foundation. We thank them for their support but acknowl-edge that the findings and conclusions presented in this report are those of the authors alone, and do not necessarily reflect the opinions of the Foundation.The authors are grateful to Don Baylor at the Annie E. Casey Foundation for his guidance and support throughout the project. We are also grateful to Elaine Maag at the Urban Institute for offering her expertise related to interactions between the Earned Income Tax Credit and dependent care flexible spending ac-counts. Finally, we extend our sincere thanks to Human Resource professionals at several private universities for generously sharing their knowledge and insights.In this two-part series, we provide a field scan of the dependent care flexible spending accounts (DCFSAs) landscape, focusing on child care expenses. We describe the proliferation and utilization of these programs, identify barriers to usage by low- to moderate-income (LMI) parents (those with household incomes at or below Area Median Income as defined by the U.S. Department of Housing and Urban Development, ~$50,000 per year), and explain features of DCFSA design and program administration that address some of these challenges. We also identify opportunities for improvements in public policies and employer practices that can level the DCFSA playing field for LMI employees.Part 1 defines dependent care flexible spending accounts and outlines the process through which employ-ees may obtain reimbursement, the benefits that employers may experience by offering DCFSAs, patterns of adoption of such plans by employers and employees, and employee decision-making regarding plan partici-pation.In Part 2, we describe features of DCFSA design and program administration that address some of the chal-lenges and provide a set of policy proposals for consideration by both employers and policymakers

    Dependent Care FSAs Work for Low- to Moderate-Income Families: 5 Action Steps for Policymakers

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    Dependent Care Flexible Spending Accounts (DCFSAs) can help workers save money on child care expenses by using pre-tax dollars, but few employees actually use the accounts, particularly low- to moderate-income (LMI) employees, because: • DCFSAs are difficult to understand; figuring out if they are possible to use and worth the trouble is a complex task for families. • Families face a “double-hit” if they use the accounts – they have to set aside pre-tax dollars for child care expenses and then pay out-of-pocket before getting reimbursed. • Using a DCFSA may require certainty about a year’s worth of child care costs, with a possible penalty for over-estimating expenses (depending on each employers’ plan rules). • DCFSAs can interact with tax credits, Medicaid, and federal/state poverty alleviation programs

    Dependent Care FSAs: The Uneven Playing Field for Employers and Workers

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    This research was funded by the Annie E. Casey Foundation. We thank them for their support but acknowl-edge that the findings and conclusions presented in this report are those of the authors alone, and do not necessarily reflect the opinions of the Foundation.The authors are grateful to Don Baylor at the Annie E. Casey Foundation for his guidance and support throughout the project. We extend our thanks to Elaine Maag at the Urban Institute for offering her expertise related to interactions between the Earned Income Tax Credit and dependent care flexible spending ac-counts.In this two-part series, we provide a field scan of the dependent care flexible spending accounts (DCFSAs) landscape, focusing on child care expenses. We describe the proliferation and utilization of these programs, identify barriers to usage by low- to moderate-income (LMI) parents, and explain features of DCFSA design and program administration that address some of these challenges. We also identify opportunities for im-provements in public policies and employer practices that can level the DCFSA playing field for LMI employ-ees.Part 1 defines DCFSAs and outlines the process through which employees may obtain reimbursement, the benefits that employers may experience by offering DCFSAs, patterns of adoption of such plans by employ-ers and employees, and employee decision-making regarding plan participation.In Part 2, we describe features of DCFSA design and program administration that address some of the chal-lenges and provide a set of policy proposals for consideration by both employers and policymakers

    Employee Financial Wellness Programs: Tips for Employers

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    There are several types of Employee Financial Wellness Programs (EFWPs), such as workplace financial counseling, workplace credit building, and employer-sponsored small dollar loans. Each program benefits the company and its employees in different ways. The Social Policy Institute at Washington University in St. Louis, with generous support from the W. K. Kellogg Foundation, studied the implementation of EFWPs at several diverse organizations, including a nonprofit in the Midwest and several supply chain locations of a national retailer, to understand the impact. As a result, we’ve identified four ways in which organizations can maximize the benefits of EFWPs and avoid pitfalls along the way

    Promoting Savings at Tax Time: Insights from Online and In-Person Tax Preparation Services

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    This report presents findings and insights from Refund to Savings: Applications for myRA, a collaborative project involving the U.S. Department of the Treasury, Washington University in St. Louis, and Intuit, Inc. The project explored methods of promoting the myRA (My Retirement Account) savings program at tax time—that is, when households file their taxes. It focused specifically on opportunities in an online tax-filing setting and in person at Volunteer Income Tax Assistance (VITA) sites. The first component of the project examined the retirement needs of low- and moderate-income (LMI) tax filers through a large, national, online survey. It also assessed the appeal of different messaging strategies with these filers. The project’s second component tested promotional messaging strategies as well as interventions grounded in behavioral economics. Both were delivered via online tax-filing software. The final component used key informant interviews with VITA site directors, staff, volunteers, and taxpayers to explore barriers to and opportunities for the promotion of myRA at VITA sites. In 2017, the U.S. Department of the Treasury announced that the myRA program would be discontinued, but this report identifies several findings with applications for general tax-time savings promotion. In particular, the key findings provide useful insights around messaging and in-person savings promotion at VITA sites. The results may also inform the development of future retirement products or programs. This study clearly shows that the need for retirement savings is great among LMI households. Despite barriers, tax time continues to present an opportunity for the promotion of both retirement savings and savings in general

    Employee Financial Wellness Programs: Tips for Providers

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    There are several types of Employee Financial Wellness Programs (EFWPs), such as workplace financial counseling, workplace credit building, and employer-sponsored small dollar loans. Each program benefits the company and its employees in different ways. The Social Policy Institute at Washington University in St. Louis, with generous support from the W. K. Kellogg Foundation, studied the implementation of EFWPs at several diverse organizations, including a nonprofit in the Midwest and several supply chain locations of a national retailer, to understand the impact. As a result, we’ve identified five ways in which providers can maximize the benefits of EFWPs and avoid pitfalls along the way

    Employee Financial Wellness Programs: Differences in Reach by Race and Ethnicity

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    Employee Financial Wellness Programs (EF-WPs) consist of a wide array of workplace-based services and benefits that aim to enhance em-ployees’ financial well-being, such as in-person financial coaching, online financial management tools, and payroll advances or short-term loans. EFWP provision varies across employers with few organizations offering the same set of services. The recently released Employee Financial Well-ness Programs Project: Comprehensive Report of Findings notes that EFWP utilization rates and employee self-reported benefits also vary widely. This report continues the examination of varia-tion in EFWP trends by breaking down measures of EFWP reach by employee race and ethnicity. We examine three measures of differences in EFWP reach: awareness of, use of, and self-reported benefits from EFWP services. By examining these three measures by employee race and ethnicity, we hope to determine whether any group of em-ployees has a substantially different experience with EFWPs than others

    Employee Financial Wellness Programs: A Review of the Literature and Directions for Future Research

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    This is a literature review of studies that have examined the implementation of financial wellness programs in the workplace. The review suggests that employee financial wellness programs (EFWPs) have drawn on both existing and new methods to improve the financial security of employees. Although a number of studies have been conducted on employer-based financial education and retirement planning, evidence concerning the efficacy of EFWPs is limited. Moreover, the methodological shortcomings of studies in the workplace financial wellness field have limited evidence concerning returns on investment and impeded efforts to make best-practice recommendations. Thus, researchers should consider strengthening the evidence base for EFWPs by using experimental evaluation designs, improving measurement, and enhancing the use of administrative data. By better understanding the features, attractiveness, and benefits of EFWPs, researchers can develop and rigorously evaluate well-designed programs with the potential for large-scale implementation

    Employee Financial Wellness Programs Project: Comprehensive Report of Findings

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    Using insights from employers and employees to generate evidence on employee financial wellness programs (EFWPs), this research report illustrates findings from a mixed-methods study assessing the potential of these programs to increase the financial stability of American workers. The research team surveyed employers that offered or were interested in offering an EFWP and subsequently conducted in-depth interviews with a subsample of those employers to acquire a greater understanding of survey responses. Further, the research team conducted intensive case studies, examining the relationship between EFWP providers and their clients as well as the dynamics of program delivery. These case studies benefitted from administrative data on employees’ participation in their employer’s EFWP. Lastly, as part of a module within the Household Financial Survey of the Refund to Savings Initiative, the research team gathered individual-level survey data from low- and moderate-income employees to understand their interests in and experiences with EFWPs
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