Dependent Care Assistance Plans (dcap)
Definition of "Dependent care assistance plans (dcap)"
Fringe benefit provided by the employer to its employees as sanctioned under the 1981 Economic Recovery Tax Act. Under Internal Revenue Code Section 129, this benefit is nontaxable to the employee and the costs incurred by the employer are considered tax deductible as a necessary business expense. The dependent under DCAP is defined as a dependent child under age 15, a dependent elderly relative, or a dependent mentally and/or physically handicapped individual. DCAP can be implemented through a salary reduction program under which the employee can choose to reduce his or her salary up to a maximum of $5000 annually for dependent care-related expenses. A current employee benefit insurance plan can be amended to include DCAP, thereby making the benefit available to all employees. DCAP permits the employee to select the type of dependent care program that he or she prefers.
Popular Insurance Terms
Practice of a ceding company whereby insurance previously ceded to a re insurer is returned to that ceding company. ...
Insurance policy in force only after the insurance company approves the application. Today, most companies use the insurability conditional premium receipt. ...
Excess funds above the amount required to establish legal reserves for the policies in force. These excess funds are generated as the result of mortality savings, excess interest earned on ...
Instrument that guarantees compliance with various city, county, and state laws that govern the issuance of a particular license to conduct business. ...
One that provides group health or pension benefits for a multiemployer plan. To lower the cost, small firms band together to take advantage of the economies of large group underwriting. ...
Health characteristic considered by an insurer underwriting an applicant for life or health insurance. Many insurance companies charge reduced premiums for nonsmokers. ...
Part of the business risk exclusion in general liability insurance that denies coverage for subsequent claims if a defective product is not recalled by an insured. For example, if a ...
Termination of a policy. Contract may be terminated by an insured or insurer as stated in the policy. If the insurance company cancels a policy, any unearned premiums must be returned. If ...
Let's dive into the world of real estate and investments! Today, we'll learn about the Securities Investor Protection Corporation, or SIPC for short. This is a genuine mouthful, but this ...
Have a question or comment?
We're here to help.