Benefit News
Honoring Those Who Serve – The HEART Act
Honoring Those Who Serve – The HEART Act
On June 17th, 2008 the Heroes Earnings Assistance and Relief Tax Act (the "Heart Act") was signed into law. Included in this new provision is a change affecting the Health FSA account.
In summary, the HEART Act amends the Section 125 use-it-or-lose-it rules to allow a plan to pay an employee the balance of his or her health FSA account if the employee is a reservist who is called to active duty for a period of at least 180 days, or for an indefinite period. This payment is referred to as a "Qualified Reservist Distribution" or QRD.
While this provision is available, it is not mandatory that an employer adopt it. Participants that are interested must first check with their Human Resource (HR) department to see if they have amended to the plan to allow a QRD. In some cases, you may have received a document from your employer showing that they did indeed choose this option. You would then work with HR to complete the necessary forms.
IRS Announces Cost of Living Increase (COLA)
The new 2009 maximum contribution for Mass Transit is $120 and the new 2009 maximum contribution for Qualified Parking is $230.
Recovery & Reinvestment Act Affects Mass Transit
On February 17th, 2009 the American Recovery and Reinvestment Act of 2009 was signed into law by President Obama.
A provision of that act entitled the Parity for Transportation Fringe Benefits, allows an increase in the Mass Transit and Van Pool maximum from $120.00 per month to $230.00 per month. The maximum will now match the Parking maximum, hopefully providing an increased benefit for workers who use Mass Transit or Van Pool arrangements to travel to and from their place of employment.
This provision will take effect March 1st, 2009. When the cost of living index is established for 2010, the Parking and Mass Transit maximums will remain equal.
