How are commuter benefits paid for?
Benefits elected under the Plan are paid for by money taken out of employees’ pay. This money is not included in their pay for income tax or Social Security tax purposes. Also, employees are not taxed on the benefits that they receive. The Plan allows employees to use tax-free dollars to pay for mass transit or parking expenses that otherwise would have to be paid with taxable, out-of-pocket dollars.
What benefits can employees choose under this plan?
Employees may choose to use pre-tax dollars for their “Transit Pass Expenses” or “Qualified Parking Expenses.”
“Transit Pass Expense” means the cost of obtaining any pass, token, fare card, or other item that entitles them to transportation on mass transit facilities such as buses, subways, or trains, which the holder uses for the purpose of commuting to work. For 2019, the maximum amount of Transit Pass Expenses that may be covered by the Plan is $265 in expenses per month. Effective January 1, 2020, that amount is increasing by $5 to $270. This amount is subject to future cost-of-living increases announced by the IRS.
“Qualified Parking Expenses” means the cost of any parking provided to an employee on or near the business premises of the employer, or on or near a location from which the employee commutes to work through the use of a transit pass. For 2019, the maximum amount of Qualified Parking Expenses that may be covered by the Plan is $265 in expenses per month. Effective January 1, 2020, that amount is increasing by $5 to $270. This amount is subject to future cost-of-living increases announced by the IRS.
2016 Transit Ruling
There are new transit rules that went into effect in some regions on January 1, 2016. To read about the new regulations and how they may impact your transit plan, click here.
What if an employee leaves or loses his eligibility?
An employee will cease to be eligible for the plan if he or she stops working for the Employer. Employee contributions for benefits under the Plan will terminate at that time. However, employees may continue to submit claims for payment of Qualified Parking Expenses that they had before that date, subject to the plan’s normal claims submission deadline of 180 days.
How can the Benefits Card be used for transportation expenses?
Under the transit rule of 2016, employees must use their Benefits Card to pay up front for their qualifying transit expenses. The card works like a debit card but actually deducts their transit funds from their transit account. Since the transportation plans work on a pay-as-you-go basis, employees cannot debit more funds than are currently in their account. Therefore, employees must make sure that enough of their payroll deposits are in their account to satisfy the transit expense they are paying for when using the debit card. If an employee tries to use the debit card and does not have sufficient funds available, the debit card will not work and the employee will have to pay for the transit expense with another method.
How do employees get reimbursed for parking expenses?
Employees can submit a claim by logging into their My Benefits account from their smartphone or computer. Claim forms can also be submitted via fax or mail:
- Upload a claim using P&A Group’s mobile app. Download the app on your Apple or Android device today!
- Fax: Toll-free (877) 855-7105
- Mail: P&A Group Flex Department, 17 Court St. Suite 500, Buffalo, NY 14202
How often will employees be reimbursed for parking expenses?
Employees will be reimbursed as frequently as they submit claims. For the fastest reimbursements, employees are encouraged to sign up for direct deposit. Employees can also choose to have a check sent to their home. The minimum check amount is $25.00 (Note: This restriction does not apply at the end of the run-out period for submitting claims).
To learn more about commuter benefits for your company, submit a contact us request to discuss your needs.