Employer Help Guide

Through scholarships or direct reimbursement, employers can alleviate some of the cost of care for their staff. Similar to college tuition scholarships offered by many employers, this option allows employers the opportunity to share the cost of care with employees (often using a sliding scale model). Employers set the parameters for how and where employees can use tuition benefits (e.g., child care tuition discounts offered for families enrolling in licensed, high-quality care programs) while still providing families with a broad range of program choices.

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*While this resource from the Office of Early Childhood and Out-of-School Learning includes rich and helpful information, please note that its references on pages 13 and 26 to the Indiana Child Care Resource and Referral Network are no longer relevant, due to recent changes in support.

DCAPs are flexible spending accounts, like accounts used for health care costs. The contribution limits for these accounts will increase in 2026 up to $7,500 annually ($3,750 each for married couples filing separately). Employers and employees can contribute to these accounts, setting aside pre-tax household income for child care and adult daycare expenses. Child care expenses must be necessary to enable one or both parents or guardians to work, look for employment, or go to school. Employers interested in adding a DCAP benefit can do so by establishing a written plan document (an IRS requirement) and distributing a benefits summary plan description to every employee.

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Even with the best child care plans, parents will encounter challenges when trying to balance home and work demands. Backup child care fills the gaps when the predetermined child care plan falls through like the child is sick, has a snow day or school holiday, or their normal caregiver cancels.

The way backup child care works will depend on the employer’s program.

• Some employers provide backup child care services for employees through partnerships with local child care and out-of-school time partners. Employees can receive a certain number of days (or credits) for use in approved partner programs in the case of emergency or short-term coverage needs.
• With some backup care programs, parents can reserve a certain number of backup care uses before a fee is incurred.
• With other programs, they will have to pay a low copay, which will likely be more affordable than hiring another caregiver or missing work.
• Typically, the employee will have a phone number to call or a website app to visit to request care.
• In addition to booking the care, there will be paperwork to complete prior to dropping off the child.

Learn More*

*While this resource from the Office of Early Childhood and Out-of-School Learning includes rich and helpful information, please note that its references on pages 13 and 26 to the Indiana Child Care Resource and Referral Network are no longer relevant, due to recent changes in support.

Employers can partner with local programs in a number of ways to ensure that staff have quick and affordable access to that program. These benefits can help alleviate the hassle of researching early child care programs, applying, and possibly being stuck on a waitlist. Employees are more likely to be recruited and stay at a company that streamlines this process for them and provides a spot in a safe, reliable child care program. Some examples of ways to partner include:

• Reserving seats: Employers can partner with local early child care providers and reserve a certain number of seats for the children of their employees. The company pays enrollment costs for vacant seats to ensure their availability when needed. This benefit is common at companies facing high turnover in specific roles.
• Priority waitlists: Employers can partner with a child care provider to secure dedicated space on their waitlist for their employees’ children. The employer provides the child care provider with potential clients (employees and their children) and a set price (usually per month) in exchange for a set number of priority spots on the waitlist (meaning if there is availability in the early care program these would be amongst the first to be considered). The child care provider provides those priority waitlist spots (instead of making them open to the community or reserved for a different business) in exchange for the agreed upon price.

On-site or near-site child care programs enable employers to address child care challenges for employees by providing access to affordable, accessible, quality care within or near the workplace that supports the needs of working families, enhances productivity, and boosts retention rates. Employers or non-profit partners may choose to offer on-site or near-site child care programs for individuals or groups of employers designed to cater to the specific needs and schedules of the employees. The convenience of on-site or near-site minimizes the disruptions and eases parents’ concerns, enabling them to stay focused on their work and business performance. Additionally, this type of employer-sponsored child care program promotes a family-friendly employer brand that helps attract and retain the kind of talent businesses need to remain competitive.