On January 1, 2024, employers who match certain criteria will be required to offer their employees a transportation benefits program to help provide commuting expenses on a pre-tax basis. This comes after the Illinois Transportation Benefits Program Act was signed into law in July 2023.

The benefit must give employees the opportunity to elect pre-tax salary deductions that can be used for transit expenses, including tokens, fare cards, vouchers, or similar items that entitle a person to transportation on public transit.

Employers will be required to offer commuter benefits if they meet the following criteria:

1. The employer is an individual, partnership, association, limited liability company (LLC), government, non-profit, or business trust that employs or exercises control over wages, hours, or working conditions.
2. The employer is located within one or more of the 38 transit zones designated by the bill, including all of Cook County and other surrounding areas. Read the bill for a full list of townships impacted.
3. The employer employes 50 or more covered employees at a location that’s within one mile of fixed-route transit service in one of the zones specified. The Regional Transportation Authority will make available a searchable map of addresses located within one mile of fixed-route transit service.

If employers meet the above criteria, they will be required to offer commuter benefits to any covered employee, which is someone who works an average of 35 hours per week on a full-time basis. Once the employee has worked for a minimum of 120 days, they must be offered the pre-tax commuter benefit.

Preparing for 2024

Employers who meet the criteria of the Illinois Transportation Benefits Act should start preparing to make sure their benefits offering will meet the new law when it takes effect on January 1, 2024. Working with a trusted third-party administrator, like Employee Benefits Corporation (EBC), that specializes in smooth functionality of benefits programs reduces the stress and administrative load of figuring it out alone.

EBC’s Commuter Benefits program give participants a Benefits Card that lets them pay for eligible transit expenses. Funds are auto-loaded onto the card and ready to use wherever it’s supported. If the participant has other EBC benefits, they can use that same card for transit expenses. Participants can also access account details and manage contributions anytime through their online account or the EBC Mobile app.

Contact sales@ebcflex.com to learn more about EBC’s Commuter Benefits services.