Chickasaw supervisors weigh options for $13,000 surplus in employee flexible-spending plan

Chickasaw County supervisors discussed several options Monday for handling a $13,005.45 balance in the county's Employee Benefit Systems (EBS) flexible-spending account tied to plan year FY2023, but they did not decide on a final approach.

The issue matters because, as staff explained at the meeting, federal tax rules and the plan terms limit who can receive leftover flexible-spending money. "The balance is $13,005.45 and 18'," a staff member said. That money, the staff member said, must be allocated only to employees who were enrolled in the FY2023 flex plan and cannot simply be folded into county general spending.

Under current practice the county can't move the funds into the county trust fund for broad medical spending; the balance may only be used for flex-plan administration costs or returned to eligible plan participants. Board members pressed staff for clarifications about whether a "premium holiday" or small distributions could be made to former employees who were enrolled in 2023 but are not currently employed. The staff member warned that any distribution would be taxable income and would need payroll and W-2 treatment.

No motion was made. County staff said they would seek additional guidance from EBS (and county payroll/tax advisors) and return with options and answers about tax reporting, eligibility of former employees, and administrative costs. The board did not direct that any funds be spent before those clarifications were returned to the supervisors.

Board secretary Sheila Shepatin, who handled meeting administration, recorded the discussion. The item will remain on a future agenda pending the additional information requested by the board.

The matter affects only the FY2023 flex-plan participants and does not alter current employee benefits or budgeted personnel costs for FY2026.