Transporation Plans and Negative Enrollment/Automatic Election Renewal

[Guest HIPAAdrome]

Does anyone have any thoughts on this question.

Q&A-12(a) of the proposed regulations states that "An election to reduce compensation for a period by a set amount for such period may be automatically renewed for subsequent periods."

Q&A-12(B) states "An employer may provide under its qualified transportation fringe benefit plan that a compensation reduction election will be deemed to have been made if the employee does not elect to receive cash compensation in lieu of the qualified transportation fringe provided that the employee receives adequate opportunity to choose to receive the cash compensation instead of the qualified transportation fringe."

Are these talking about the same thing, or is (B) talking about initial elections and (a) talking about continuing elections already in place? Can an employer with monthly election periods require an affirmative election to get into the plan, and then automatically renew salary reduction elections each month without sending out notices to everyone who is participating. The participants would be told at the outset and probably periodically that they always can cancel their election at the beginning of any month, but they wouldn't be told this each and every month.

What do you think?

[This message has been edited by HIPAAdrome (edited 05-22-2000).]

[Guest mdrucker]

In summary, an employee can make a monthly election once at the initial enrollment. The election will remain in effect each month until the employee submits another election that will change the amount or stop it by changing the amount to zero. Most employees commuting expenses are consistent each month, but you need to allow for changes. The employer does not have to notify the employee each month that a deduction will be taken, he/she will see this in their payroll stub. It is up to the employee to notify the employer if he/she wants a change.