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PERSONNEL - Personnel Director Coral Ferrin
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Requested Action(s)
recommendation
a) RESOLUTION - Requesting Board of Supervisors approval of a resolution to permanently amend the pre-tax contribution amount for employees participating in the Dependent Care Flexible Spending Account (FSA). For married couples filing jointly the amount will increase from $5,000 annually to $7,500 annually and for married couples filing separately and those individuals filing as single the amount will increase from $2,500 annually to $3,750 annually, effective 1/1/26
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Financial Impact:
There is no financial impact associated with approval of this action.
Background Information:
The Tehama County Health Insurance Advisory Committee (TCHIAC) met on November 6, 2025. Members from Alliant Insurance Broker were also present. The group discussed the option of increasing the pre-tax limit for Dependent Care flexible spending accounts (FSA) from $5,000 annually to $7,500 annually and for married couples filing separately and those individuals filing as single from $2,500 annually to $3,750 annually.
The increased contribution limits are optional for employers because of legislative changes made through the One Big Beautiful Bill Act (OBBBA). If approved, the changes will be effective beginning January 1, 2026. Except for a temporary increase during the pandemic, the current amounts have been in place since 1986. Higher pre-tax limits help support employees who are both working parents and caregivers. Pre-tax dollars can be used for various caregiving expenses, such as nannies, summer camps, daycare, pre-k programs, and elder care.
The Tehama County FSA is a "use it or lose it" style plan governed by IRS regulations. To avoid forfeiture, employees who participate in this plan should estimate their annual expenses carefully and track eligible expenses throughout the calendar year. There is a deadline of March 15 annually for the following year to submit cl...
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