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Section 132 Commuter Benefits Plans

Section 132 Commuter Benefits, also known as a Qualified Transportation Plan, is a fringe benefit program to help Participants reduce the cost of commuting to and from work, as defined below. Under Section 132(f) of the Internal Revenue Code (IRC) employees are permitted to pay for commuter vehicle expenses, transit passes, and qualified parking expenses on a tax-favored (pre-tax) basis.

Pre-tax commuter benefits are available in two separate “spending accounts”:

  • Commuter Spending Account – Transportation cost associated with a commuter highway vehicle for travel between an employee’s residence and place of employment, and any transit pass can be pre-taxed.
  • Parking Spending Account – Qualified Parking Expense can be pre-taxed.

How Transit and Commuter Spending Accounts Work

An employee may establish a spending account to reimburse predictable expenses incurred for out-of-pocket commuter and transit expenses. Once they determine their annual predictable expenses for the period of time covered by the Plan Year, a portion of that amount may be paid for with pre-tax pay, The elected pre-tax pay amount is then deposited on a per pay basis to the spending account. The maximum pretax deferral allowed is $260 per month for the Commuter and Transit Spending Account.

Unlike the typical Flexible Spending Account(FSA), employees can change their election amount at any time during the Plan year. In addition, unused balances at the end of the year can be carried over to the next Plan year. However, any unused balance upon termination of employment could be forfeited.

Commuter Spending Account Reimbursement Process

To receive reimbursement, an employee must complete a claim form and submit it along with their paid bills to the designated claims administration representative. Once the claims administrator receives the claims, all claims will be processed for reimbursement.

Qualified Commuting and Transit Expenses

Expenses, which may be included, are “Transit Passes”, which means any pass, token, fare card, voucher or any other item that entitles you to use mass transit for the purpose of traveling to and from work. “Commuter Highway Vehicle” Expenses may also be included but limited to highway vehicles with seating capacity for at least six adults (not including the driver) and at least 80 percent of the vehicle mileage must be for purposes of transporting employees in connection with travel between their residences and place of employment. And, expenses for trips during which the number of employees transported for such purposes is at least half of the adult seating capacity for such vehicle (not including the driver).

How Parking Spending Accounts Work

An employee may establish a spending account to reimburse predictable expenses incurred for qualified parking expenses. Once he or she has determined their annual predictable expenses for the period of time covered by the Plan Year, a portion of that amount may be paid for with pretax pay, deposited on a per pay basis to the spending account, which was elected. The maximum pretax deferral allowed is $260 per month for the Parking Spending Account which is a $5 increase from 2017.

Unlike Flexible Spending Accounts, employees can change their election amount at any time during the Plan year. In addition, unused balances at the end of the year can be carried over to the next Plan year. However, any unused balance upon termination of employment could be forfeited.

Parking Account Reimbursement Process

To receive reimbursement, an employee must complete a claim form and submit it along with their paid bills to the designated claims administration representative. Once the claims administrator receives the claims, all claims will be processed for reimbursement.

Qualified Commuting and Transit Expenses

Expenses that may be included are Parking Expenses which means parking lots 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 by mass transit, commuter highway vehicle, or by carpool. Such terms shall not include any parking on or near property used by the employee for residential purposes.

How The Harrison Group helps you with Section 132 Commuter Benefits Plans:

  • Customer Service is our FOCUS – Your employees will need to devote a little bit of time paying for these out of pocket expenses and/or submitting claims for their flexible spending accounts. Recent studies show that only 44% of employees fully comprehend their benefits. It is critical to select a Section 132 Commuter Benefits administrator who not only answers the phone but also assists employees when they have questions. We offer considerable resources to provide both onsite and online education for your employees.
  • A Partner with Proven Expertise – With over 30 years of experience in the industry, our clients have come to rely on us to partner with them and their health insurance broker to provide the necessary education and benefits plan consultation.
  • Concierge Customization – One size does not fit all.  We offer customized solutions to meet your specific objectives regardless of your size or demographics.
  • Technological Advances – We offer the latest in industry-leading technology to our clients including a web and mobile application for accurate claims submission.  We also offer online education for employers and their employees.

If you have questions, please give us a call or contact us online.  We will be happy to assist you.

Contact

3 RAYMOND DRIVE, SUITE 201
HAVERTOWN, PA 19083
service@theharrisongrouponline.com
PHONE: 610-853-9075
TOLL FREE: 855-222-5727
FAX: 610-853-9079

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