When companies think about supporting working parents, they often start with a simple question: "How can we help them find childcare?" But in reality, most parents aren’t struggling to find someone they trust. They already have a network—a babysitter they rely on, a neighbor who helps out, a grandparent who watches the kids twice a week. What they’re really struggling with is the cost of care. That’s why the next generation of employee childcare benefits must move beyond access and focus on affordability.
Childcare costs have risen faster than inflation in most parts of the country. The average family now spends over $10,000 per child, per year on care. That’s more than in-state college tuition in many states. For two-working-parent households or single parents, these costs aren’t optional—they’re a non-negotiable part of working life. And yet, most "childcare benefits" programs aren’t helping families pay for care. They’re helping them find care—something most already have.
Many of the leading childcare benefits providers offer concierge-style services: help finding a daycare center, searching a vetted babysitter marketplace, or emergency backup care. While these services can be helpful for some, they often miss the mark for the majority of working families. According to internal surveys across large employer groups, more than 70% of parents already use a known and trusted caregiver. They don't need a babysitting app. They need help paying the sitter they already trust.
The biggest hurdle for families trying to get reimbursed for care through a Dependent Care Flexible Spending Account (DCFSA) or company subsidy is compliance. Tax rules around who qualifies as a caregiver, how to collect receipts, and how to submit for reimbursement are often too complicated. Many families leave hundreds or even thousands of dollars on the table simply because the process is too confusing.
Employers have a massive opportunity to rethink childcare benefits around cost relief. This means:
Offering pre-tax Dependent Care FSAs with higher usage rates
Providing direct childcare subsidies or reimbursements
Allowing families to use benefit dollars with their own caregivers (friends, family, sitters)
Offering tools that make it easy to stay compliant with IRS rules
Dependent Care FSAs let employees set aside up to $5,000 in pre-tax income to pay for qualifying childcare expenses. But due to poor design and administration complexity, many eligible employees don’t take advantage of it. Worse, fewer still use the full amount.
The solution? Make it easy to:
Use their own caregiver (like a trusted neighbor or part-time sitter)
Submit payments or receipts
Handle the necessary documentation, including caregiver tax IDs or signed forms
Track balances and remaining eligible expenses
When employees know they can use their existing caregiver and the process is frictionless, participation and satisfaction skyrocket.
Direct subsidies are another powerful lever. Whether through Lifestyle Spending Accounts (LSAs), reimbursements, or taxable cash stipends, these funds can be made more impactful when families don’t have to switch care providers to use them. A well-designed childcare benefit should allow families to apply subsidy dollars to their existing care arrangements. This may mean letting them pay their sitter through a compliant software platform that takes care of recordkeeping and proof of use.
Talk to your employees. Find out who’s taking care of their kids. Chances are, many are using:
A babysitter who’s been with the family for years
A grandparent who watches the kids after school
A nanny they split with a neighbor
Design a benefit that includes these caregivers, not one that requires them to be replaced.
Offering a Dependent Care FSA isn’t enough. Most HR teams don’t have the bandwidth to educate employees or troubleshoot when their claims are rejected. That’s why partnering with platforms that specialize in DCFSA compliance for informal care networks is key.
These tools should help employees:
Pay their caregivers
Automatically track eligible expenses
Store receipts and documentation
Submit for reimbursement with one click
Ensure IRS compliance without needing a CPA
If you’re giving employees a stipend or subsidy, make sure it’s not tied to a specific marketplace or care network. Give them the freedom to use the funds where they actually need them—even if that means a grandma or a neighbor.
To maintain accountability and audit readiness, pair this with technology that:
Confirms payment to a real caregiver
Provides receipts or time tracking
Allows for opt-in tax compliance if needed
Don’t just track how many people signed up for a sitter search platform. Track:
How much of the DCFSA is actually being used
How many families are submitting reimbursements
How many benefit dollars are going directly to care, not admin
Employee satisfaction with the value of the benefit
When families are able to use childcare benefits for the care they already have, everyone wins:
Parents get meaningful financial relief
Employers see higher benefit satisfaction and retention
Caregivers get paid through compliant systems
HR teams aren’t stuck fielding questions about reimbursement processes
In fact, companies that reframe childcare benefits around affordability see higher participation in DCFSAs, better retention among working parents, and fewer last-minute care disruptions.
It’s time to stop thinking of childcare benefits as a discovery tool. Most families already have care; what they need is help paying for it. By shifting from "finding care" to "funding care," employers can create more inclusive, more equitable, and more impactful childcare support.
With the right tools, families can:
Use pre-tax dollars with a personal babysitter
Receive reimbursements seamlessly
Stay compliant with IRS and employer rules
Free up more of their income for other expenses
Childcare is a cost problem, not an access problem. Modern childcare benefits should reflect that. By investing in benefits that prioritize affordability, reduce friction, and support personal care networks, employers can offer a benefit that truly meets the needs of today’s working parents.
This isn’t just the future of childcare benefits. It’s the smarter, more human approach that puts families first.
SitterSync is built to help families maximize their childcare benefits by making it easy to pay and manage care through their trusted networks. Employees can:
Use Dependent Care FSAs or company subsidies to pay their own caregivers
Submit reimbursements seamlessly
Handle all documentation and tax compliance without extra hassle
For employers, SitterSync offers:
A turnkey solution to distribute childcare subsidies directly to employees
Compliance tools to track and validate eligible expenses
An easy integration into existing benefits platforms
And for companies already using platforms like Care.com, UrbanSitter, or SitterCity, SitterSync is completely complementary. While those services help employees find care, SitterSync helps them manage, book, and pay for it — especially when they already know who they want to hire.
The result? A more flexible, family-first childcare benefit that meets parents where they are.