The trade-off, though, is frequently a reduction in benefits opportunities, either through a lack of funds, HR personnel, or simply awareness of the diversity of low- to no-cost programs out there which can take advantage of significant breaks in the tax code for employees.

Dependent Care Assistance Programs (DeCAPs) and other flexible benefits / Section 125 programs can be set up and administered easily, have almost no direct costs associated with them, and the benefits to employees can be substantial, primarily in the form of income and other tax savings, such as social security.

Employers can also realize some savings on their share of payroll taxes as well. The mechanism for the savings is simple: pre-tax money is withheld from the employee's paycheck for qualified benefit expenditures like DeCAPs, so neither the employee nor employer are taxed on that portion of the employee's income.

Depending on an employee's marginal state and federal tax rates, plus social security, this could result in savings approaching 40-50% on the total amount of the pre-tax set-aside. DeCAPs are limited to $5,000 per year with some qualifications), so the tax benefit here could approach $2,500 for the employee, and a $400 savings for the employer (in the form of reduced SSN payments), with very little set up costs.

For other qualified flexible benefits plans, such as Section 125 withholdings for, say, the employee's share of health plans, the tax benefits can also run into the thousands of dollars.

So what, exactly, is a DeCAP? In short, DeCAPs help employees pay for the costs of dependent care which they are likely already paying for, up to $5,000 if both parents earn at least that much and file a joint return. These costs can include day care programs, nanny care, educational institutions up to kindergarten, before and after school programs, and even summer camp in some cases.

Broad enrollment in the plan is important, both in terms of qualifying for the plan and avoiding the characterization that the plan provides excess benefits to owners or key employees.

From an owner/employer's perspective, employees very quickly realize the value in the programs, and that is a powerful inducement to set them up, especially given their low overhead. As with any employee benefits plan, widespread participation in the plan is important, but given the ease with which it can be established and the immediate benefits received, they are well worth the effort.