Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Employee Benefits topic
No spam. Unsubscribe anytime.
Laguna Hills council tables city‑funded FSA after debate over cost and timing
Summary
The council voted unanimously to table a proposal to fund employees’ flexible spending arrangements until budget discussions after staff said the city would face timing and collective‑bargaining constraints and estimated a $95,700 maximum annual cost if the city funded FSA at the IRS limit for all full‑time employees.
Finance Director Hendrickson told the council that a city‑funded Health Savings Account (HSA) is not an option because the city’s plans are not high‑deductible; the remaining option is a flexible spending arrangement (FSA). Staff noted the city currently offers employee‑funded FSAs via payroll deductions and that the IRS limit for 2025 is $3,300 per employee. With 28 full‑time staff, Hendrickson said fully funding the IRS limit could create a theoretical maximum exposure of about $95,700 annually but that actual cost would vary by employee participation.
Councilmember Williams moved to table the issue for the upcoming budget discussions (April). Councilmember Hazel proposed a substitute motion to immediately fund a modest monthly amount for staff until bargaining concluded, arguing employees face rising healthcare costs; that substitute motion failed to attract a second. The original motion to table was seconded and passed unanimously by roll call.
Why it matters: The council chose not to add a near‑term city expense but acknowledged staff should include FSA funding as part of broader budget and labor negotiations. Staff also flagged timing constraints because open enrollment has already closed for the current calendar year and collective bargaining obligations require negotiation with the Laguna Hills City Employees Association before changing salary or benefit terms.
Next steps: The item will be discussed in budget meetings and during labor negotiations; no immediate funding was approved.
