Things You Need to Know About Your Commuter Benefits - HealthEquity Skip to content

Considering commuter benefits? 5 things you need to know

Commuter benefits aren’t complicated, but knowing simple rules can help you save even more.

Commuter benefits let members use tax-free money to pay for eligible parking and transit expenses. As you consider whether to use commuter benefits this year, here are five things you need to know.

#1 Payment options vary depending on your organization

Commuter benefits are funded via pre-tax payroll contributions. But how you spend your benefits may vary slightly based on how your organization sets up your plan.

Some commuter benefits work like a traditional pre-tax spending account. You elect pre-tax contributions, then those contributions accrue a balance in your commuter account that you can spend on eligible parking and transit expenses or use to reimburse yourself for the same.

Other commuter benefits operate on a pay-as-you-go basis. You simply place orders directly from your commuter account. After you place an order, the money will be automatically deducted from your paycheck on a pre-tax basis.

This works the same if your plan includes a dedicated Commuter Card. Pre-tax payroll deductions will correspond to your card spending.

Be sure to review your plan documents to find out what type of commuter benefits your organization offers.

#2 Eligible expenses vary based on your organization

Some commuter benefits cover eligible transit expenses only, other plans cover eligible parking expenses only. Many plans cover both.

When your organization sets up your commuter benefits, they’ll designate eligible expenses. Be sure to review your program documents to find out what commuter expenses are eligible.

#3 You can start, stop, or change contributions at any time

Beyond the tax savings, the next best part of commuter benefits is the flexibility. If you elect to contribute to a commuter account, you can choose to change contributions or stop them at each benefit cycle (such as month-to-month).

Similarly, there’s no need to wait until the annual enrollment window to elect commuter benefits. So, if your commuting habits change, you can easily change your benefits elections and contribution amounts.

You can always view the latest IRS contribution limits at this page.

#4 There’s no annual ‘use-it-or-lose-it’ rule

Money you contribute to your commuter benefits will stay available through the next year and beyond. The only time you risk losing your money is if you’re terminated, change employers, or retire.

Helpfully, in case of termination you may still be able to use your Commuter Card for 90 days—giving you plenty of time to spend down remaining funds. However, Parking Commuter Card funds are generally forfeited immediately upon termination date (as always, plan rules may vary).

You also usually have six months following the end of the benefit month to file claims to be reimbursed from your account for expenses incurred prior to your termination.

#5 Commuter benefits have spending limits

The Internal Revenue Service (IRS) caps the amount you can spend using commuter benefits with both monthly limits as well as annual limits.

For the latest IRS commuter limits, please check out this page.

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HealthEquity does not provide legal, tax or financial advice. Always consult a professional when making life-changing decisions.