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Crest Hill council approves flexible spending accounts for nonunion employees starting Jan. 1, 2026
Summary
The Crest Hill City Council voted to add Internal Revenue Code Section 125 flexible spending accounts (FSAs) as an optional benefit for city nonunion employees, with an administrative cost estimated by staff and a plan to notify licensees and employees before rollout.
The Crest Hill City Council on Oct. 6 approved adding flexible spending accounts, commonly called Section 125 plans, to the city’s optional employee benefits package effective Jan. 1, 2026.
City Administrator Blaine Wing told the council the change would allow employees to set aside pretax dollars for dependent care and eligible medical items, increase take-home pay for participants and yield tax savings for the employer. “What I’m seeking is approval tonight to let our consultants and our health benefit consultants know that we’d be able to add the Section 125 plans as part of our optional benefits, starting as of 01/01/2026,” Wing said.
Wing told the council the city’s cooperative health plan administrator estimates roughly $3,000 in annual administrative fees to run the benefit; the remainder of accounts would be funded by employee payroll contributions. He said the city’s broker would manage reminders and an internal fund to handle unspent balances, and that unused funds most commonly revert to the employer’s general account to help offset program costs.
Council discussion focused on eligibility and employee notice. Wing said the benefit is being offered initially to nonunion employees; unions would be handled separately and participation by bargaining-unit employees would depend on negotiations. A council member also underscored the “use-it-or-lose-it” nature of many FSAs and urged clear employee communications about eligible expenses and any short-term extension periods the IRS permits.
Motion by Alderman Nate Albert, seconded by Alderman Tina Overland, to establish the flexible spending account passed on a roll call that recorded six yes votes and one no vote (see actions). Alderman Darrell Jefferson cast the lone no vote.
The council directed staff to notify employees and to work with the city’s benefits consultants to implement the plan for the Jan. 1, 2026 effective date.
The ordinance-setting process for employee benefits will be managed by the city’s administration and human resources teams; staff said they will provide more detailed employee materials prior to open enrollment.
