Comptroller Fiscal Year Memo Letter Head


M E M O R A N D U M

To:Chief Fiscal Officers, MMARS Liaisons, and Payroll Directors
From:Martin J. Benison, Comptroller
Date:March 29, 2010
Re:Qualified Transportation Benefits Program (QTBP)

Comptroller Memo
FY#2010-21

Executive Summary

As announced at the recent Payroll User Group, the Commonwealth is transitioning from an MBTA-only pre-tax pass program to a full option Qualified Transportation Benefit Program (QTBP) under IRS Code 132(f)*. This transition will be completed in two Phases - Phase 1 is to enroll existing MBTA pass purchasers into the new QTBP plan to cover Transit (MBTA) for the month of May and prevent a break in coverage.

Phase 2 enrollment of current and new employees into expanded Transit and Parking pre-tax benefits is targeted for May HR/CMS deductions for June purchases but is dependent on the completion of testing and enrollment implementation. Additional guidance will be issued when ready.










MBTA Pass Program Transition to Qualified Transportation Benefits Program (QTBP)

Background:

The QTBP (Qualified Transportation Benefit Program) is rolling out with the upgrade of HR/CMS. The customizations for MBTA pass program in the former HR/CMS could not be continued. Currently, approximately 5,800 employees purchase MBTA Passes pre-tax; this is a component of the new QTBP program and is included in Phase 1. A third party contractor has been selected to manage a full option transportation benefit program for the Commonwealth. Benefits Strategies was selected based on their technical ability to manage a program of this size, strong references and established experience as a provider of Commonwealth benefit programs as well as lowest cost to the employees.

The administrative fee for QTBP is $1.50 per month, a maximum of $18 per year. The fee may be paid pre-tax if there is capacity under the federal and state caps in combination with transit purchases, or under phase 2, parking benefit. The new QTBP program maximizes all the available pre-tax transportation benefits that were not previously available to employees.

Phase 1

The first phase of the QTBP rollout began March 18 th in coordination with the HR/CMS upgrade and will provide currently enrolled employees the opportunity to continue MBTA pass and ticket purchasing. All prior deduction codes in HR/CMS have been end dated following the March deduction for the April 2010 pass program. As part of the HR/CMS upgrade, the value of the March deductions will be converted to the new deduction code for Transit benefits as a placeholder for April deductions for these active users pending their confirmation of enrollment in the QTBP.

A new fee amount has also been converted for all these employees. However, it has been determined that all of these 5,800 employees, active MBTA pass participants, will have the fee refunded as part of the program transition for the MBTA pass component of the QTBP.

As such, the fee will be reimbursed to these employees through a new earnings code that has also been established for the existing employees receiving a pass. In addition, any current employee that presents themselves as a user of the MBTA pass program and is in HR/CMS as receiving a pass for December 2009, or January, February and March 2010 (deductions in November 2009 to February 2010) will be added to the category of transitioning employees.

Attached is the first communication of FAQ's for benefits of the new program for your reference. On or about April 1 st current MBTA Pass purchasers will receive a mailing, and an e-mail if available, to determine if they wish to continue in the QTBP program. If employees wish to drop the program, departments need to end date the converted earnings code and deduction codes. The first deductions will be made from pay period end date April 10, 2010 in HR/CMS to allow the purchase of May MBTA passes and tickets. Beginning with the May passes the Commonwealth will not longer manage purchase and distribution of passes. Employees will purchase May MBTA passes and tickets and either pay for the pass with the Benefit Strategies FlexExpress Card or file for reimbursement with Benefit Strategies. Employees being converted will receive further information and instructions from Benefits Strategies next week followed by a FlexExpress Card (debit card) on or around April 16 if they submit a completed form choosing to continue the program.

The rollout requires an enrollment form be completed and returned to the payroll clerks as well to confirm ongoing participation in addition to the employee's direct enrollment with Benefit Strategies.

In summary, the following steps will occur in phase 1:



Notice to Payroll Directorsthis memo
Notice to participating employees - by e-mail and direct mailtentatively March 31 st
End Date current MBTA Pass deductionsApril 2 nd
Establish new deduction code for all active participantsApril 2 nd

Employees sign and fax or mail completed form:

  • To their Payroll Department by April 10 th
  • To Benefit Strategy by April 12 th
A FlexExpress card (debit card) sent to enrolled employeesby April 20 th
Employees can begin purchasing for May 2010 transit costsApril 22 nd

Phase 2

This office will work with Benefit Strategies to roll out Phase 2 to all other employees to provide the new optional benefits of the QTBP.

These new options include:

  • Transit pass purchases from regional and private transportation companies
  • Out-of-state transit program benefits
  • Van pool costs
  • Parking costs

Please contact Kevin McHugh at Kevin.McHugh@state.ma.us if you have any questions.

Enc. Phase I FAQs doc format of    2010_21_attch.doc



cc:General Counsels
Internal Distribution

* Revised from IRS Code 137(f) to 132(f) on 7/8/2010