How do I Enroll in This Benefit?
Enrollment is now processed electronically through HSA Bank Follow the online-ordering instructions to enroll in this benefit.
What is a Pre-tax Transportation Benefit?
The Transportation Equity Act for the 21st Century allows employers to offer a plan on a pre-tax basis through which employees may pay for certain employment-related transportation expenses. Examples of these expenses include the purchase of MBTA passes and payment of parking lot fees as part of commuting to work.
How Do I Save With This Benefit?
Each month, participating employees have dollars deducted from their paycheck, up to a limit set by the IRS, on a pre-tax basis to pay for passes, vouchers, and other qualified transportation expenses. Since these deductions are taken on a pre-tax basis you are saving taxes because you are not paying income or social security taxes on the wages used to purchasing transit or parking. The net effect is that you are buying your pass at a discounted price. Lesley University has contracted with the firm HSA Bank to assist in administering this benefit. They provide online enrollment, order and delivery of your pass and/or voucher directly to your home address. You may save up to 35 percent, depending on your tax bracket, which might mean up to 3 free months of free transit or parking over the course of the year.
Example: John Doe takes public transportation to work, spending $55 per month for his monthly pass. John is in the 24 percent tax bracket. Savings: $55 x 12 months x 24 percent = $158 per year.*
*This benefit only applies to federal taxes. Massachusetts Department of Revenue does not adopt any part of the federal gross income exclusion for transit passes. As such, any amounts elected for commuter passes will be subject to Massachusetts state taxes.
Eligibility
All benefits-eligible Lesley University employees, including Adjunct Faculty, may participate in this pre-tax transportation benefit program. This benefit is only offered to eligible employees at Lesley University. Spouses/spousal equivalents and dependent children are not eligible.
How much may I set aside on a tax-free basis?
The IRS code Section 132 (f) sets limits on the amount of money an employee may use on a monthly basis to pay for these expenses. In 2020, you may set aside up to $140/month on a pre-tax basis to pay for transit expenses (e.g. rides on the MBTA) and/or up to $270/month for costs associated with parking*. You have the ability to elect both mass transit and parking expenses each month if these expenses are considered qualified. For instance, a park and ride situation where you park at a MBTA parking lot in order to take the subway to work would be considered a qualified expense (the T fare would count toward the $140 transit limit, the parking fee would count toward the $270 parking limit).
*The IRS may change the amount that is allowed to be tax-free on an annual basis.
Because pre-tax transportation expenses are elected on a monthly basis, there is no "use it or lose it rule" similar to what is seen with our medical and dependent care flexible spending accounts (FSAs). With the pre-tax transportation benefit, you pay for your pass the month before you need it. Elected expenses are deducted from your paycheck on a monthly basis.
What is considered a qualified Transit Expense?
You may elect up to $140/month to pay for qualified mass transit expenses for the purpose of commuting to and from work. These expenses include the purchase of:
- MBTA subway, bus, and/or boat pass (fare card).
- MBTA vouchers used to buy tokens, single-ride tickets, 10-ride tickets, etc (Transit Pass).
- Vouchers used to pay transportation companies, such as private bus lines, for a ride to and from work.
What is a qualified parking expense?
You may pay for up to $270/month of qualified parking expenses for the purpose of commuting to and from work. Depending on where you park, HSA Bank sends the parking company a check for your parking expense amount on a monthly basis.
Are there commuting expenses not part of this plan?
Expenses such as taxis, tolls, mileage, gasoline, parking at meters near campus, and business travel are not eligible for pre-tax treatment.
When may I enroll?
If you are an eligible employee, you may elect, make changes to, or terminate your pre-tax transportation benefit at any time during the calendar year through the HSA Bank website. There is no open enrollment period for joining this benefit.
What are the deadlines for enrolling or making changes to my account?
You must complete all changes online by the fifth of the month 30 days PRIOR to the usage month's pass. For example, to change, terminate, or order your January 2024 pass, you must enroll online by 11:59 pm EST on December 1, 2023. You are charged for your pass in the month of December, and your pass will be delivered to your home address the last week in December in time for January usage.
How do I receive my pass or voucher?
Once you have elected your pass, voucher, etc. and the deduction has been taken from your pay, it is sent by HSA Bank to your home address by the last day of the month before the month for it is to be used. For example, you will receive your January transit or parking voucher no later than December 31. Make sure to update your information if you change your address.
What if I don't receive my pass via the US Mail?
If you do not receive your pass by the first week in the month you are supposed to use it, please contact HSA Bank at 800.357.6246 so they can investigate the situation.
What if I have questions?
Assistance from HSA Bank may be accessed via askus@hsabank.com. For additional questions, contact your Human Resource Representative.