Great news on Transit Plans!

January 3, 2013

 

by ANN CARRNS  

New York Times 

 

Those who commute to work using mass transit or van pools are eligible for the same amount in employer-provided pretax commuter benefits this year as their colleagues who drive and park, thanks to the fiscal package passed by Congress this week.

Workers whose employers offer such benefits can pay for their monthly transportation costs through pretax payroll deductions, saving them money.

 In 2012, the amount that mass transit commuters were allowed to set aside monthly in their pretax commuter accounts fell to $125, from $230, while the limit for parking costs increased to $240, from $230, because of a cost of living adjustment.

The new fiscal measure increases the pretax transit benefit to $240 a month. (The actual cap is subject to confirmation by the Internal Revenue Service, which can adjust it in increments of $5, if necessary, to reflect inflation, said Jody Dietel, compliance officer with WageWorks, a benefit management firm.)

 But because the fiscal package merely extended this “parity,” rather than making it permanent, its continuation after this year is still subject to future legislative action.

 Why is it so difficult to make the equal benefit permanent? It does not seem to make sense to offer more of an incentive to drive than to take mass transit.

 Ms. Dietel said the transit benefits were lumped together with various other “extender” provisions in the tax code – items that have to be revisited and approved periodically. Conflicts in Congress make it difficult to reach agreement on fiscal matters.

 “Congress is very politically charged,” Ms. Dietel said. The loss in tax revenue from the transit parity provision is estimated at $220 million, according to the Joint Committee on Taxation.

 WageWorks is part of a group working to support transit benefits, which are especially popular in urban areas. “We are working hard to make it permanent,” she said.

 Although the measure also makes the benefit parity retroactive for 2012, it is unclear how employees who take public transit will be able to take advantage of that provision. The fiscal act was passed on Jan. 1, after most company payrolls had closed for 2012, Ms. Dietel noted, and “the devil is in the details.” WageWorks and other benefit managers are seeking guidance from I.R.S. on the matter, she said, but it may be that most employees will see the higher transit limit as a benefit in the future. 

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About rjoyner

Ric Joyner, CEBS, GBA, CFCI Customer Experience Officer Ric is a founder of eflexgroup.com a national web based TPA for Cafeteria, HRA, HSA, Transit, VEBA and COBRA plans. eflexgroup is a leader in self-service employee benefit systems. eflexgroup was the first TPA in the industry to go “online” in 1999 allowing employees to self-serve 24 hours per day. He has lead the industry with eflex by placing provable customer service statistics, live, on eflexgroup.com Ric is celebrating his 32nd year employee benefits. He helped create TPAs such as TASC and Employee Benefits Corporation in Madison WI. He was a licensed insurance agent for 29 years. The designations Mr. Joyner holds are; Certified Employee Benefits Specialist, Group Benefit Associate, Certified Flexible Compensation Instructor, board approved by ASPA to teach Cafeteria Plan regulations. Ric also has a bachelors of science in Information Technology and MBA (emphasis is project management) and graduated summa cum laude from Capella University with a 4.0. Ric helped found the National Association of Professional Benefit Administrators (NAPBA.org). NAPBA is dedicated to training administrators in best practices and grass roots lobbying. Ric has served in the past as the Wisconsin Association of Health Underwriters State President in 2003. Ric is a frequent speaker and article writer for prestigious associations such as NAHU.org, NAPBA.org, Wisconsin SHRM, Austin SHRM, PACE.org, International Foundation of Employee Benefits, Tampa Bay AHU, WI AHU, Florida AHU, Florida NAIFA and participates on the List Serves (compliance programs for Consumer Driven Products of NAHU and International Foundation of Employee Benefits)

2 thoughts on “Great news on Transit Plans!

  1. Steve Harmison

    Rapid Transit is very essential for the public transportation in big city areas. Due to the busy working environment and time priority the buses should be available as rapid transit and help people to go their offices quickly. People can able to easily reach their respective offices in time due to the help of rapid transit services. It will now active in Chicago and it is a nice thing or the people over their. But the most important thing is the traffic system and the bus routes or the roads. These things need to be well organized for the rapid transit.

    Reply
  2. dui information

    Ecological superstition doesn't help. The insistence on the unreal benefits of 'organic' meals and the evils of GM plants and intense farming indicates reduced efficiency and more stress on the really limited sources – normal water and area.

    Reply

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