Home > Resources > Compliance Resources > Compliance Quarterly > July 2009 Compliance Quarterly > July 2009 Question of the Quarter

July 2009 Question of the Quarter

QUESTION
Will our Dependent Care Account Plan (DCAP) reimburse expenses for children attending summer camp?
 
ANSWER

Day Camp
If the primary purpose for summer day camp is custodial care and the cost of summer day camp is incurred so that the employee and spouse can both work, then the expense will most likely be reimbursable. However, each expense will need to be looked at on an individual basis.

Overnight Camp
Overnight camps are not eligible expenses under DCAPs because they are not considered to be employment-related. The IRS has informally indicated that even if the camp can separately allocate the expenses for daytime and overnight activities, the expenses associated with the day camp still would not be reimbursable because the child is enrolled in an overnight camp.

Keep in mind that certain plan documents are written to specifically exclude summer camps, so you should always consult your own Cafeteria Plan to confirm that reimbursement is allowable. In addition, employees may need to make changes to their DCAP elections to either increase or decrease the election amount depending on the cost of summer camp. Therefore, employers should be prepared to accommodate these election changes.

Do you have a Compliance question you would like to see featured in our Question of the Quarter? Send your question to ComplianceQuarterly@meritain.com.

Compliance Quarterly is being provided as an informational tool. It is recommended that plans consult with their own experts or counsel to review all applicable federal and state legal requirements that may apply to their group health plan. By providing this publication and any attachments, Meritain Health is not exercising discretionary authority over the plan and is not assuming a plan fiduciary role, nor is Meritain Health providing legal advice.