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"Mandated" Use of Vouchers/Purchase Cards?


Guest LFrankel
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Guest LFrankel

New to section 132 & FSA programs.

With that said, my company has an issue. We rolled out a (pre-tax only) transportation reimbursement incentive program effective 1/1/03. We are now in discussions with the outsourcing vendor for the 2004 program year. They have informed us that per the new IRS guidelines we must provide vouchers if they are "readily available." However, the vendor is going to a purchase card to satisfy the IRS requirements. If we choose not to go this route, we must sign a hold harmless-type agreement.

My questions:

1) Can someone help explain the "readily available" and 1% financial rules a little bit better?

2) We are a NYC employer. Must we do this? I'm not seeing the upside of changing our process for what is still a new program for us. Our vendor has confirmed that ee's will lose out since the cards cannot be distributed before mid-Jan 2004.

3) Does anyone know where I can find the reg reference? I've tried the IRS website, and the Code of Fed Regs to no avail.

Thank you one and all.

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Most of the major Transit Authorities have info available. Try this link:

Look for the info under the various service providers on the page.

You might also want to look at the Internal Revenue Code itself (section 132) and do a search on www.ebia.com and www.google.com for "qualified transportation program" etc. Various issues have been discussed in the EBIA Recent Developmants and Question of the Week. There has also been discussions on Benefitslink such as:

http://www.benefitslink.com/articles/washb...l021111.1.shtml

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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  • 2 months later...

LFrankel,

Did you ever find out whether vouchers are readily available in New York? My understanding is that the NY providers are generally charging more than 1%.

Thanks.

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