Years ago, Commuter Benefits were one of the best kept secrets in the benefits industry. Many times, it was even challenging to find locations and facilities which accepted anything but cash. So, it was common to see cash reimbursement programs for commuter benefits.
As Commuter Benefits have gained mainstream attention and transit agencies have looked for more efficient payment models, the days of cash transactions are largely a thing of the past, with nearly all transit systems accepting card payments. As a result, the IRS released Revenue Ruling 2014-32 outlining new standards for commuter benefit programs that may provide a new twist for some employers.
In short, Revenue Ruling 2014-32 indicates:
- Transit benefit card programs have become readily available in virtually all markets.
- As a result of this increased availability and acceptance, employers must make a benefit card program (or other transit purchase program) available in lieu of a cash reimbursement only program.
Employers that have been using cash reimbursement only programs, whether in-house or through a third party, should be considering adding a commuter benefits card program (or other transit purchase program) to ensure their plan remains compliant. The new guidelines go into effect January 1, 2016.
For Benefit Resource clients, most are unaffected by the guidance as they are already offering compliant programs through the Beniversal PrePaid Mastercard and eTRAC Prepaid Mastercard.
If you have questions on the impact of Revenue Ruling 2014-32, please feel free to contact us at info@BenefitResource.com.
Revenue Ruling 2014-32