What employers should consider
Finding the right Commuter Benefit Plan (CBP) doesn’t have to be difficult. There are steps you can take to narrow down your plan options and determine which CBP is the best fit for your company and your employees. When evaluating commuter benefits, there are three primary considerations you should make (along with three primary employee considerations). To view the employee considerations, check out part two.
#1: Financial Landscape
The first question you’ll likely have is “What will this cost and will it save the company money?” To understand this, you’ll want to examine your savings from an annualized perspective. To calculate your estimated savings, you will need to take the average election for each employee, less any administration fees.
Calculating elections. As an employer, you save 7.65 percent on every dollar that employees elect. You are able to maximize elections when your program is equipped for use at any and all locations that offer eligible services. Whether you have offices across several cities or several states, working with a comprehensive benefits administrator frees you from the limitations regional transit programs may have. An ideal program encompasses all forms of pre-tax transportation (i.e. transit, rideshare, vanpooling) and parking benefits.
Calculating fees. Some administrators will charge administrative fees based on a percent of the purchase or election. For example, you may pay 4.5% of elections. At $100, you will pay $4.50 per employee. At $255 (or the pre-tax limit), you will pay $11.48. Other administrators will charge a flat per participant per month fee. It is important to understand if the per participant fee will cover both mass transit and parking benefits or if these will be charged separately. This is important to consider when evaluating commuter benefits.
#2 Program Administration
Some employers choose to self-administer their commuter benefit programs. This often puts employers and their employees in a position to front money before having access to their commuter benefit funds. Choosing to work with a benefits administrator, like Benefit Resource, creates the flexibility to make elections available as they are deducted from payroll. Working with an administrator also provides access to alerts, announcements, and detailed reporting regarding elections, deposits and account use. A benefits administrator can also alleviate the stress and time needed to administer a program in-house. A trusted benefits administrator saves you time and money from customer service and complaint management to keeping pace with legislative changes.
#3 Expertise Available
You can access a full team of support and knowledge when you partner with a benefits administrator. Whether there is an issue with an employee’s account or questions about regional and non-regional transit system operations, you can turn to a trusted source for information and assistance. An administrator may also manage the changes that come with new legislation, such as the transit laws that affect New York City and Philadelphia in 2023. This allows you to focus on your core business.
Evaluating Commuter Benefits can often be a secondary focus for employers but as you can see, there are several key considerations employers should make to ensure they are maximizing their savings and reducing administration.