NJ Passes Commuter Benefit Law

NJ now requires companies with 20 or more employees to offer Commuter Benefits. While the law is in place, you have plenty of time to comply. However, FSA plan administrators are already using the new law to try and convince employer’s to act now. So here are the basics you need to know.

What is the Commuter Benefit?

It is the 3rd leg to your Flexible Spending Account (FSA). Many employers already have the healthcare and dependent care FSA. In NJ, the Commuter Benefit is rarely used today. The Commuter Benefit allows for payment of parking and transit (bus/train fares) through payroll deduction on a pre-tax basis. The reality is most employees in NJ drive to work and park in employer lots with no charge. Since most NJ employees don’t need a Commuter Benefit, most employers have not taken on the added cost and administration for a program that benefits so few.

The New Law

Governor Murphy signed the new law earlier this month. While it does require all employers with 20 or more employees to offer the Commuter benefit, the law is “inoperative” for 365 days and includes a 90 day window to comply before any fines set in. So while you will eventually have to comply, you have plenty of time to figure out how to do so. Please don’t fall for any scary marketing tactics.

Our Recommendation

Add the Commuter Benefit to your FSA at your next Open Enrollment. It is a logical time for communicating with the employees and introducing new programs. You don’t have to change any plans today. So why create work that is not needed. If you make it part of your next benefit renewal period, you will be in compliance before your 15 month (365 inoperative days plus 90 day window) deadline arrives.

If you have any questions, please contact Eric Thieringer (973-219-3312).