HomeMy WebLinkAbout6.h. Flexible Spending Account Transfer
EXECUTIVE SUMMARY
City Council Regular Meeting: January 4, 2022
AGENDA SECTION:
AGENDA ITEM: Flexible Spending Account Transfer
Consent
PREPARED BY: Teah Malecha, Finance Director AGENDA NO. 6.h.
ATTACHMENTS: None APPROVED BY: LJM
RECOMMENDED ACTION: Motion to approve a transfer of $64,300 from the Operating
Checking Account to the Flexible Spending Account to be paid back through employee
withholdings as they occur.
BACKGROUND
The City offers Flexible Spending Accounts (FSA) for staff with funds withheld through payroll.
Historically, the City has transferred the amount of the annual scheduled FSA withholdings for staff in
January of each year from the Operating Checking Account to the Flexible Spending Checking Account.
This amount ensures that there are sufficient funds to cover any overages that may occur for claims made,
in the case that withholdings are not completed through payroll. Federal law requires that the employer set
aside a sufficient amount of funds to cover all claimed expenses throughout the plan year, even though the
amounts may not have been withheld from an employee at the time that the claims have been made.
The amount requested is the total amount for the upcoming plan year 1/1/2022 to 12/31/2022. Any
additional amounts to cover the 2022 plan year and final year-end adjustments necessary to balance out the
account for the calendar year (i.e. new hires) will be administered internally during the year or at year-end
as needed.
When the money is withheld from the employee’s payroll check, it is deposited into the Operating
Checking Account to reimburse this transfer of funds.
RECOMMENDATION
Staff recommends that the City Council approves the transfer of $64,300 from the Operating Checking
Account to the Flexible Spending Account to be paid back through employee withholdings as they occur.