One Big Beautiful Bill Guide for County Treasurers: Payment Processing, SNAP Costs & Medicaid Changes 2025-2028

Updated October 8, 2025 | 15-minute read

Quick Summary: What County Finance Directors Need to Know Now

Three Critical Changes Affecting County Operations:

1. 1% Remittance Transfer Tax (Effective January 1, 2026): Applies to international payments made via money orders or cashier’s checks—not bank transfers
2. SNAP Cost Increases (FY2027-2028): Administrative costs shift from 50% to 75% state share; benefit cost-sharing begins FY2028 based on error rates
3. Medicaid Administrative Changes (2026-2028): Doubled eligibility checks, new work requirements, and mandatory copayment collection starting October 1, 2028

Bottom Line for Most Counties: If you process payments through normal banking channels and aren’t in a SNAP cost-sharing state, your immediate impact is minimal. Budget for increased staffing needs starting late 2026.

Essential Information on New Federal Payment Requirements Affecting County Operations

The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduces several changes directly impacting county payment processing operations, treasury functions, and budgeting responsibilities. This guide addresses the specific concerns county treasurers and finance directors are searching for as they prepare for implementation.

Whether you’re managing county vendor payments, processing benefit program transactions, or planning next year’s budget, understanding these three key areas will help you maintain compliance and operational efficiency: the remittance transfer tax, SNAP administrative changes, and Medicaid payment modifications.

Frequently Asked Questions: OBBBA Impact on County Operations

Does the Big Beautiful Bill affect county payment processing?

Yes, but minimally for most counties. The 1% remittance transfer tax (effective January 1, 2026) only applies to international payments made via physical instruments like money orders or cashier’s checks. Standard bank transfers, ACH payments, and wire transfers from county accounts are exempt. Most counties will experience zero impact.

Which states require counties to pay SNAP costs?

Minnesota is the primary state where counties directly share SNAP administrative costs. Some counties in New York, North Carolina, and California also have cost-sharing arrangements. Contact your state human services agency to confirm if your county has direct financial obligations.

When do Medicaid cost-sharing requirements take effect?

October 1, 2028, is the statutory effective date for mandatory copayment collection from Medicaid expansion enrollees. However, work requirements begin earlier (December 2026) and twice-yearly eligibility checks start late 2026.

How much will the SNAP changes cost my county?

For counties in cost-sharing states: Administrative costs could increase 25-50% in FY2027. Benefit cost-sharing in FY2028 depends on your state’s payment error rate—states below 6% pay nothing; states above 10% pay 15% of benefit costs.

Are municipal bonds affected by the Big Beautiful Bill?

No. Tax-exempt municipal bonds, 501(c)3 bonds, and Private Activity Bonds remain completely unchanged. Counties retain full access to tax-exempt financing for infrastructure projects.

Part 1: The 1% Remittance Transfer Tax – Does It Affect Your County Payments?

The Bottom Line for County Treasurers

Starting January 1, 2026, a 1% excise tax applies to certain international money transfers. While this primarily targets personal remittances, counties making international payments need to understand whether their transactions are affected.

Quick Decision Tree: Is Your Payment Taxable?

Your county payment is EXEMPT if:

• You pay from your county’s bank account (checking, savings, investment accounts at traditional banks)
• You use the county credit card or debit card issued by a U.S. bank
• You process ACH or wire transfers through your normal banking relationship

Your county payment IS TAXABLE if:

• You pay vendors or contractors using money orders
• You use cashier’s checks for international transactions
• You provide cash payments for any international transfers

Real-World County Scenarios

Scenario 1: Sister City Program Payments – Your county has a sister city relationship in Mexico and occasionally sends funds for joint projects. If you wire money from your county account, no tax applies. If you purchase money orders, 1% tax applies.

Scenario 2: International Vendor Payments- You pay a Canadian software vendor for services. If you pay via ACH or county credit card, no tax applies. If you use a cashier’s check, 1% tax applies.

Scenario 3: Employee Expense Reimbursements – An employee traveled internationally and submits for reimbursement. Standard county check or direct deposit, no tax applies.

Action Items for Your Treasury Office

Before December 31, 2025:

1. Review your accounts payable procedures for any use of money orders or cashier’s checks for international payments
2. Contact your primary bank to confirm your wire transfer and ACH processes remain tax-exempt
3. Notify department heads that international payments must go through standard banking channels
4. Update your purchasing manual if it currently allows money orders for vendor payments

Budget Impact: Most counties using standard banking relationships for all payments will have zero impact. Only counties regularly using physical payment instruments (money orders, cashier’s checks) for international transactions need to budget for the 1% cost.

Who Handles the Tax?

According to EisnerAmper’s analysis, the payment provider (Western Union, bank issuing cashier’s check, etc.) is responsible for collecting the tax and remitting it quarterly to the IRS. Your county doesn’t file anything unless you’re making taxable transfers—then you pay the 1% at the time of transfer.

Questions to Ask Your Bank: “Are wire transfers and ACH payments from our county accounts considered withdrawals from a Bank Secrecy Act-compliant financial institution and therefore exempt from the remittance transfer tax?”

The answer should be yes, but confirm for your records.

Part 2: SNAP Changes – What County Finance Offices Need to Know

Does This Affect Your County?

Direct Financial Impact: Only if you’re in Minnesota, New York (some counties), North Carolina (some counties), California (some counties), or other states where counties share SNAP administrative costs.

Indirect Operational Impact: All counties with human services departments processing SNAP applications—increased workload means increased staffing costs even without direct benefit cost-sharing.

The Numbers That Matter for County Budgets

Timeline:

• FY2027 (starting July 1, 2026, in most states): State administrative costs increase from 50% to 75% of total
• FY2028 (starting July 1, 2027, in most states): States may begin paying a percentage of benefits based on error rates

In Cost-Sharing States: If your state passes costs down to counties (like Minnesota does), your county’s SNAP administrative line item could increase by 50% in FY2027.

Olmsted County, Minnesota officials report preparing for county cost shares to shift from 50% to 75% by end of 2026.

What’s the “Payment Error Rate” and Why You Should Care

SNAP Payment Error Rate Quick Reference:

Source: H.R. 1, Section 10102, One Big Beautiful Bill Act

The payment error rate measures how accurately SNAP benefits are calculated. Think of it as a quality control score. States with error rates above 6% will pay more toward benefits starting in FY2028.

Here’s the catch for counties: New work requirements for recipients ages 55-64 and parents of older children create more complex eligibility determinations. More complexity = higher risk of errors = potentially higher costs.

The error tolerance has been reduced from $57 to $0. Every miscalculation counts.

Budget Planning Worksheet for County Finance Directors

If you’re in a cost-sharing state:

Current annual county SNAP administrative costs: $__________

Multiply by 1.5 for FY2027 estimate: $__________

For FY2028 benefit cost-sharing, contact your state human services agency for:

• Current state payment error rate: _______%
• Projected county share formula: __________

If you’re NOT in a cost-sharing state:

Estimate increased staffing needs for:

• New work requirement verification: _____ FTE
• More frequent eligibility checks: _____ FTE
• Enhanced error prevention reviews: _____ FTE

Practical Steps for County Treasurers

1. Confirm Your State’s Model: Call your state SNAP office and ask: “Does our county have any direct financial obligation for SNAP administration or benefits under the new federal law?”
2. Get the Data: Request your state’s payment error rates for FY2024, FY2025, and projections. This tells you whether FY2028 benefit cost-sharing will be minimal or substantial.
3. Talk to Your HR Director: Increased verification requirements mean increased workload. Will you need additional eligibility workers?
4. Plan for FY2027 Budget: If you’re in a cost-sharing state, budget for at minimum a 25% increase in your SNAP administrative line item, with potential for up to 50%.

System and Payment Processing Implications

Your county’s SNAP payment processing likely runs through your state’s EBT (Electronic Benefit Transfer) system, so you won’t need to modify payment infrastructure. However, you may need:

• Enhanced case management systems to track work verification
• Document imaging upgrades to handle increased paperwork
• Additional payment processing capacity is required if handling more applications due to frequent redeterminations

Part 3: Medicaid Changes – Payment Processing and Administrative Workload

What’s Changing That Affects County Operations

Most counties aren’t directly responsible for Medicaid payments to providers—those go through state systems. However, many counties operate eligibility determination offices, community health programs, or county hospitals. Here’s what matters for your budget and operations:

Doubled Eligibility Verification Workload

Current: Medicaid expansion enrollees verify eligibility once per year. New (starting late 2026): Verification required twice per year

Budget Impact: If your county handles eligibility determinations, you’re looking at approximately double the processing volume for the expansion population.

Staffing Calculation:

• Current FTE dedicated to Medicaid eligibility: _____
• Additional FTE needed for doubled frequency: _____ (roughly 50% increase accounting for economies of scale)

Work Requirements – Documentation Challenges

The legislation adds work requirements for certain Medicaid expansion adults. Here’s the practical challenge: AARP notes that guidance on how states will track and verify work hours isn’t expected until summer 2026.

For County Eligibility Offices: You’ll need procedures to:

• Document work hours for applicable enrollees
• Verify employment with employers or accept self-certification
• Track exemptions (caregivers, pregnant women, disabled individuals, etc.)
• Process more frequent denials and appeals

System Requirements: If your county uses its own eligibility system, you’ll need fields for work hour tracking and exemption codes.

Cost-Sharing Collections (Effective October 1, 2028)

If your county operates health clinics or a county hospital serving Medicaid patients, you’ll need to collect copayments at the point of service beginning October 1, 2028. This is the statutory effective date established in the legislation.

According to Medicaid.gov, the federal cap remains 5% of family income. States set the actual copay amounts within federal limits.

Payment Processing Implications:

• Point-of-service billing systems for small copayments ($5-$35 per service)
• Tracking to ensure patients don’t exceed 5% income cap
• Collection procedures (federal law allows providers to refuse service for unpaid copays)
• Bad debt provisions (Medicaid copay collections historically run 40-60%)

For County Treasurers: If you manage a county health system’s revenue cycle, budget for:

• Billing system upgrades: $__________
• Additional collection FTE: _____
• Estimated copay revenue (net of bad debt): $__________

County Hospital and Clinic Financial Planning

Provider Tax Reductions: The legislation reduces the rate states can tax healthcare providers to fund Medicaid, decreasing from current levels to approximately 3.5% by FY2032.

What this means: If your state uses provider taxes and your county operates a hospital or clinics, your facilities may pay less in provider taxes BUT the state may have less money for Medicaid reimbursement rates.

Net effect: Varies by state, but could result in downward pressure on reimbursement rates that affects county health system revenues.

State-by-State Impact Comparison Table

Payment Processing Systems Readiness Checklist

For County Treasurers Managing Payment Systems

Immediate (By December 31, 2025):

• Audit international payment methods for remittance tax exposure
• Confirm all international payments route through bank accounts (not money orders)
• Update accounts payable procedures to prohibit money orders for international transactions
• Brief department heads on remittance tax implications

Short-Term (January-June 2026):

• Verify EBT payment systems are state-managed (no county action needed)
• If the county runs its own SNAP systems, coordinate with the state on error reduction strategies
• Budget for increased eligibility processing workload beginning late 2026
• If the county operates health facilities, begin scoping the copay collection system requirements

Medium-Term (FY2027 Budget Cycle):

• Incorporate 25-50% increase in SNAP administrative costs (if in a cost-sharing state)
• Add FTE for doubled Medicaid eligibility checks
• Add FTE for SNAP and Medicaid work requirement verification
• Budget for health system copay collection infrastructure (if applicable)

Long-Term (FY2028 and Beyond):

• Monitor state payment error rates quarterly for benefit cost-sharing projections
• Track state Medicaid provider tax changes and reimbursement rate impacts
• Assess cumulative staffing needs across all programs
• Plan for October 1, 2028 Medicaid copay collection go-live

Vendor Management: Questions to Ask Your Payment Processor

Most county payment processing happens through banks and state systems, but if you use third-party processors for any functions, ask:

For International Payments: “How do you determine whether a transaction is subject to the 1% remittance transfer tax? What documentation will you provide confirming our county payments are exempt?”

For Benefit Payment Systems: “What system upgrades are you planning to accommodate increased SNAP and Medicaid transaction volumes starting in 2026?”

For Health System Revenue Cycle (if applicable): “Can your system track individual patient cost-sharing totals to ensure we don’t exceed the 5% income cap? What’s your timeline for implementing Medicaid copay collection?”

The Good News: Municipal Bonds Unchanged

According to GFOA, the OBBBA preserves tax-exempt municipal bonds without changes. Your county’s ability to issue bonds for infrastructure projects remains unchanged.

This is significant because while operational budgets face adjustments, your capital financing tools remain intact. Counties can continue accessing affordable financing for roads, bridges, buildings, and other infrastructure.

County-Specific Resources

Get Your State’s Information

SNAP Error Rates and Cost-Sharing: Contact your state’s Department of Human Services or equivalent agency. Ask specifically for:

• Current payment error rates
• Whether your state passes costs to counties
• Projected county cost-sharing formulas for FY2027 and FY2028

Medicaid Administrative Changes: Contact your state’s Medicaid office. Ask specifically for:

• Timeline for twice-yearly eligibility checks implementation
• County responsibilities for work requirement verification
• Cost-sharing implementation plans for county health systems

Professional Association Support

National Association of Counties (NACo): Your first stop for county-specific guidance and peer networking. Fellow county finance directors in your state likely face identical questions.

Government Finance Officers Association (GFOA): Technical tracking page at www.gfoa.org/tracking-the-2025-one-big-beautiful-bill-act

State Association of Counties: Your state association can often provide state-specific interpretations and coordinate advocacy with your state legislature.

Official Government Sources

• IRS Remittance Tax Guidance: www.irs.gov/newsroom/one-big-beautiful-bill-act-of-2025-provisions
• Full Legislative Text: www.congress.gov/bill/119th-congress/house-bill/1/text
• Medicaid Cost-Sharing Rules: www.medicaid.gov/medicaid/cost-sharing

Quick Reference: Key Dates for Your Calendar

Final Recommendations for County Finance Directors

Three Things to Do This Week:

1. Call your state: Determine if your county has direct SNAP cost-sharing obligations and get current error rate data
2. Meet with your HR/human services director: Discuss staffing needs for increased eligibility workload starting in 2026
3. Review your accounts payable procedures: Confirm you’re not using money orders for any international payments

Budget Planning Priorities:

• Low Risk Counties (no SNAP cost-sharing, minimal Medicaid eligibility workload): Add 1-2 FTE for increased administrative requirements
• Moderate Risk Counties (some cost-sharing or substantial eligibility operations): Budget 10-15% increase in human services operating costs for FY2027-2028
• High Risk Counties (direct cost-sharing + large eligibility operations + county health system): Budget 15-25% increase and plan for health system billing infrastructure upgrades

What Not to Worry About:

• Your county’s general payment processing infrastructure probably needs no changes
• EBT systems are state-managed—not your responsibility
• Municipal bond financing remains available on same terms
• The remittance tax likely doesn’t affect your regular operations

What to Monitor:

• Your state’s SNAP payment error rates (quarterly)
• Federal agency guidance on work requirement verification
• Your state legislature’s budget decisions on passing costs to counties
• Medicaid reimbursement rate changes affecting county health systems

Have Questions?

This legislation affects counties differently based on your state’s model for administering benefit programs and whether you operate health facilities. When in doubt:

1. Ask your state agency – They have the specific formulas and timelines for your state
2. Connect with peer counties – Through NACo or your state association
3. Consult your county attorney – On legal obligations and compliance requirements
4. Talk to your auditors – On documentation and internal control implications

Important Disclaimer for County Finance Professionals

The information in this guide is provided for educational and informational purposes to help county treasurers and finance directors understand the One Big Beautiful Bill Act’s provisions. This content represents our interpretation of publicly available legislative text, government guidance, and professional analysis as of October 8, 2025.

Please note:

• This guide does not constitute legal, accounting, or professional financial advice for your specific county
• Federal implementation guidance is still being developed by Treasury, IRS, HHS, and USDA
• State-specific interpretations and county obligations vary significantly by jurisdiction
• Effective dates and requirements may be subject to regulatory clarification or amendment

We strongly recommend:

• Consulting with your county attorney on legal compliance obligations
• Working with your state agencies to confirm specific cost-sharing formulas and timelines
• Engaging your county’s external auditors on internal control and documentation requirements
• Coordinating with your payment processing vendors on technical implementation

All readers should verify information with official government sources and qualified professionals before making financial, operational, or budgetary decisions. Counties act on this information at their own discretion and risk.

For official guidance, refer to IRS.gov, Congress.gov, Medicaid.gov, and your state administrative agencies.

Related Resources You May Be Searching For

Popular county treasurer searches:

• “How to calculate SNAP cost sharing for counties”
• “Medicaid work requirement verification procedures”
• “County budget impact Big Beautiful Bill”
• “Remittance tax exemptions local government”
• “OBBBA implementation timeline counties”

For immediate assistance: Contact your state association of counties or reach out to peer finance directors in your state through NACo networks.

Last updated: October 8, 2025. Bookmark the GFOA tracking page for ongoing updates as federal agencies issue implementation guidance.