Volume 13, Issue 4   |   March 5, 2009

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Benefits Alert! 
Commuter Benefit Change


Included in the American Recovery and Reinvestment Act (ARRA) was a provision to equalize the amounts that are available under tax free fringe benefit transit and parking reimbursement programs. The prior limits were $120 per month for transit and $230 for parking. Both limits are now $230 and will index together beginning in 2010. This change is not mandatory and employers must decide if and when they want to adopt the increased transit limit. 

Below is a list of action steps employers can follow to implement the increased transit limit.

Step 1

Decide Whether to Accept the Higher Transit Reimbursement Limit

Companies who manage their plans internally may experience a slight increase in administrative requirements. Companies who outsource administration may experience higher fees to update account settings. If you choose to adopt the higher transit limit, additional action will be required as shown in steps 2-4 below. 


Step 2

 

 

Amend your Plan Documents and Employee Communications

You must amend all documents, communications, and enrollment tools. Items could include:

  • Section 132 Plan Document and Summary Plan Description

  • Employee and/or benefits handbooks

  • New employee orientation materials

  • Online employee self service platform

  • HR or benefits information on your intranet

  • HR or benefits websites provided by third-party vendors

  • Any other materials containing benefit information

Note: ArlenGroup will update all materials we maintain on our clients’ behalf.


Step 3

 

Notify your Commuter Benefit Administrator

Your administrator may have specific steps you need to follow to notify them of your decision to increase the transit benefit. You will need to work with them to determine the effective date and get the appropriate documentation.


Step 4

 

Notify Employees of the Change

Gather content from your commuter benefit administrator and develop employee materials. Ensure you note enrollment and change deadlines. 


The Insight newsletter is not intended to provide legal advice but perspective on recent regulatory issues, trends and standards affecting employee benefits. Please consult your own legal counsel for further information on the topics discussed in this issue of Insight.

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