Late Pickup Fees: FSA Eligibility

Late Pickup Fees: reimbursement is not eligible with a Flexible Spending Account (FSA)
Late pickup fees are not eligible for reimbursement with a flexible spending account (FSA), health savings account (HSA), health reimbursement arrangement (HRA), or a limited-purpose flexible spending account (LPFSA). Late pick-up fees may be eligible with a dependent care flexible spending account (DCFSA).

What are late pickup fees?

Many fees and expenses related to daycare facilities can be considered eligible for reimbursement under certain consumer-directed healthcare plans. One expense that is not ever eligible, though, is a late pickup fee, which is charged when an arranged pickup time at a daycare facility has not been met. Late pickup fees are similar to early drop-off fees. Daycare facilities negotiate the specific times at which a dependent will be dropped off and picked up, and breaking those times can prove costly and problematic for the facility. Fees are charged to cover expenses associated with unexpected timing, and also to discourage violations of the agreements made regarding when a dependent will be picked up or dropped off.

A grace period is a common part of a daycare facility's set times for supporting a dependent. Grace periods may run from 15 to 30 minutes, typically. Sometimes a late fee is a set amount per violation of the agreement; it's also common to have a late fee in the form of a charge per minute before/after the pickup/drop-off time. Some daycare facilities change their daycare fee structure and simply apply that new schedule to unexpected dependent care times, whether it's before or after the expected times.

Dependent care providers often prioritize their own resources and time above their income and sustainability, and might therefore have exceptionally high late fees that are meant to encourage a serious attitude towards scheduled pickups and drop-offs. It's very common for daycare users to treat their daycare facility's time as secondary in importance to their own, which is fine so long as the consequences are understood and agreed upon, beforehand, by both parties.

Late pickup fees may be eligible with a dependent care flexible spending account (DCAP) as it is related directly to care. As always, be sure to check with your benefits administrator to understand what your plan allows.

If a fee is charged by a daycare provider under the label of a "late fee" then there is no eligibility for reimbursement. Some daycare providers may offer different schedules of payment for off-hours care, and depending on the rules of daycare eligibility and reimbursement as determined by the individual consumer-directed healthcare plan, these fees may be considered eligible. Late fees, however, are never eligible.

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