DataPath 132

CONVERSION BENEFITS

This section does not apply to Conversion Benefits. The employees do not have to submit claims for conversion benefits since the employer supplies the benefit directly to the employee and deducts the cost from the employee's paycheck.

The employer documentation of the expense, the recipient, the date, and the amount is adequate substantiation.

Please note the exceptions in Monthly Limits for transit passes handled through a Transit Pass and Vanpooling Expenses Conversion Benefit.

REIMBURSEMENT BENEFITS

This section applies only to Reimbursement Benefits. Under Reimbursement Benefits, the employees must submit a claim form with substantiation (see below) within the stated time frame (see below).

ENTRY INTO THE SYSTEM

With DataPath132, users do not need to sort incoming claims by employer before entering the claims in the system. All the user needs to do is enter the SSN and the system will find that employee!

The first action when entering claims is to open a claim batch. The claims will not be available for reimbursement until the claim batch is released. Before releasing a batch, the user can print a report listing all the claims entered for verification and filing.

When entering a claim, a new claim form is started. When the SSN is entered, the employee name and address and the employer name is defaulted in. Once this is done a Claim Form Entry screen appears to enter each line item. The system will warn the user if the monthly limits are exceeded.

If the expense is not eligible for any reason or if more information is needed, the claim is denied and the reason selected from a popup screen. DataPath132 comes with a few reasons included, but the user can modify these reasons through Globals. Once the claims are entered, the user can create Claims Denied Letters to send to the employees.

TIME FRAME

The plan documents establish Claims Submission Grace Periods (the period after the end of a coverage period or after an employee's termination date during which claims can be submitted) for current participants and for terminated employees. Claims cannot be submitted after that time.

SUBSTANTIATION

The regulations require that reasonable procedures be taken to ensure that the employees have actually incurred the expenses before the claims are paid. Unlike § 125 cafeteria plans, the regulations do not require a statement from an independent third party. The employee can submit a cancelled check, credit card receipt, or other proof of the expense as substantiation.

This can be simple when the employees pay a monthly fee for a parking space and can get a receipt, but it is difficult for some transportation expenses, such as parking meters, coin boxes, or transit tokens. In these cases, the regulations stipulate that where no receipt are possible, the employer can accept employee certifications that the expenses had occurred unless the employer has reason to believe that the certification is incorrect.

It is not necessary to have actually used the transportation or parking before becoming reimbursed since employees are deemed to have "incurred" the expenses once they have paid the expenses. For instance, if an employee pays for a parking space or transit pass (or receives a transit pass) at the beginning of the month, the employee does not have to wait until the end of the month to receive payment.

MONTHLY LIMITS

The monthly limits also apply to claims submitted each month. If the employee submits a claim for more than the limit, the excess is declared ineligible. The system then generates a Claims Denied Letter notifying the employee of the ineligible amount and the reason it is ineligible. The monthly limits may not be combined.

LIMITS APPLY TO TYPE OF EXPENSE

The monthly limits apply to (1) parking expenses and (2) transit passes and vanpooling.

Parking Expenses

If an employee has elected both a Qualified Parking Expenses Reimbursement Benefit and a Qualified Parking Expenses Conversion Benefit, the claims within a month for both expenses must be added together and the total cannot exceed the monthly limit.

The claim for the Conversion Benefit, generated by DataPath132, is applied to the limit before the claims submitted for the Reimbursement Benefit are considered. If the monthly limit is exceeded, the claims for the Reimbursement Benefit are reduced by the amount of the excess.

Transit Pass and Vanpooling Expenses

The same requirements for combining Reimbursement Benefits and Conversion Benefits for parking expenses (see above example) before applying the monthly limits also apply to Transit Pass and Vanpooling expenses.

Code § 132(f) combines expenses for transit passes and vanpooling into one category. Expenses for either transit passes or vanpooling expenses (or any combination) can be claimed under one benefit.

DETERMINING VALUE

The value of a benefit is the amount the employee can buy the benefit for, not the face value of the benefit.

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