Ceridian observes increased interest in Commuter Benefit Programs

As high gas prices prompt many workers in the United States to reconsider how they conduct their daily commute, Ceridian, a company in human resource management outsourcing solutions that maximize the value of people, reports that it is observing increased enrollment in commuter assistance programs.



Frequently used in major cities by mass transit commuters, qualified transportation benefits are also available to the growing number of vanpool commuters. Under Internal Revenue Service (IRS) Code, Section 132, workers can set aside pretax dollars to use for work-related transportation expenses from mass transit and parking. The pretax dollars are exempt from federal income taxes, Social Security taxes and, in most cases, state income taxes. Depending on the employeeís tax bracket, they can save up to 38 percent in taxes on the elected amount. In turn, employers do not pay FICA tax on the money their employees set aside.

According to the SHRM 2005 Benefit Survey Report, only 14 percent of reporting companies offered a qualified transportation expense plan or transit subsidy. However, research conducted by Ceridian in late 2004 revealed that nearly 80 percent of current enrollees find commuter benefits ìvery important.î

ìHigh gas prices may cause workers to reexamine family budgets and eschew their solo drive to work, instead vanpooling or traveling to and from work on buses, trains and subways. We encourage attendees at the 18th Annual Benefits Management Forum & Expo and employers in major cities to consider such commuter benefit programs as a cost-effective means of easing the out-of-pocket expense for their commuting workforce,î said Jim Corcoran, senior vice president for Ceridian Employee Benefit Services. ìOrganizations that offer commuter assistance programs provide a valuable incentive for candidates who are reluctant to take a job in the city because itís too hard to get to work. These organizations find that a comprehensive program is a great add-on to existing employee benefits, helping them attract and retain the kind of employees that keep their organization competitive.î

Administering the pretax deduction program is easy with Ceridianís Commuter Administration Services. Parking expenses incurred are managed through a pre-taxed reimbursement account. Expenses incurred for mass transportation are managed by providing employees the ability to order vouchers or fare media from local transportation authorities with pre-taxed dollars. Ceridian supports the entire process, including documentation, employee education and enrollment, personalized assistance, claims administration and management of fare media.

The program is very convenient for employees, who are able to enroll online to have their deduction automatically taken out of each paycheck; and they can make changes to the election amount as frequently as the plan allows. Mass transportation vouchers and fare media are mailed to participating employees each month so they can avoid the hassle of waiting in line at the transit station for their tickets. Parking expenses are reimbursed on a monthly basis. Vanpooling with 6 or more passengers, excluding the driver, is another expense that is eligible for a reimbursement through Ceridianís Commuter Administration Services.

More than 200 employers count on Ceridian for the complete management of their commuter planís enrollment, administration and compliance. In addition to Commuter Administration Services, Ceridianís portfolio of Reimbursement Account Solutions includes Flexible Spending Accounts (dependent care and health), Premium Only Plans, and Tuition Reimbursement.