Rules Updated for Cash Reimbursements tied to Transit Plans
The IRS announced that as of December 31, 2015, employers will no longer be permitted to provide qualified transportation fringe benefits in the form of cash reimbursement in geographic areas where a terminal-restricted debit card is ready available (Rev. Rule. 2014-32). After that date, the IRS will no longer permit employers to use cash reimbursement if the only available voucher or similar item exchangeable for a transit pass is a terminal-restricted debit card.
New Transit Claim Process starting in 2016
To accommodate IRS Ruling explained above for Pay Me Back (PMB) claims, we will be updating our Transit claim form. Members will need to sign an agreement on the claim form verifying that their claim is eligible based on the ruling’s guidelines, which will be presented to them on the form.
For groups that provide a Choice Strategies Card for their Transit benefits, we will be disabling member’s ability to submit Transit claims through their online accounts. They must submit claims using the updated Transit claim form, available January 1, 2016.
Thank you for helping us comply with this new guidance. These new measures help ensure that members’ pre-tax Transit funds are only spent on IRS-qualified Transit expenses.