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Transit Subsidy Vanpool

Vanpooling is one of the most cost-effective and convenient commuting alternatives to driving alone.

Business man riding his bike to work. Van Pool

Van Pool 101

Guide for Participants Who Commute via Van Pool

This section provides overview of processes and procedures governing administration of and participation in the PSC Transit Subsidy Benefit Program for employees using van pools.

Vanpooling is one of the most cost-effective and convenient commuting alternatives to driving alone. Vanpooling can provide many benefits – including saving time and money, reducing commuter stress, caring for the environment, improving quality of life, companionship, and reducing the wear and tear on your personal vehicle. But the benefits don't stop there!

Vanpoolers have the added benefit of a transit subsidy. HHS employees are eligible to receive a transit benefit of up to $255 per month, per employee, for using transit, which includes vanpooling. With a $255 transit benefit and other special incentives that are available, vanpooling can be one of the least expensive ways to get to work at little or no cost.

General Van Pool Regulations

Van pool vehicles must comply with all Internal Revenue Service (IRS) and U.S. Department of Transportation (DOT) regulations guiding the use of van pools and eligibility and distribution of federal transit subsidy benefits for federal employees. To include, but not limited to:

  • Vehicles must meet the 80/50 rule:
    • Transporting employees between their residence and place of employment must account for at least 80 percent of the vehicle’s mileage.
    • The vehicle must be filled to at least 50 percent capacity (excluding the driver) (e.g., in a 7-passenger vehicle, at least three adult passengers and the driver must be traveling in the vehicle). If a van pool has fewer than the minimum number of riders on any given trip, that trip does not count toward the 50 percent of the 80/50 rule.
  • Vehicles must have a seating capacity of at least 7 people (6 adult passengers and the driver).
  • Van pool participants may not use benefits to “hold” their space in a van pool during an extended absence. The cost of holding a seat is considered an out-of-pocket expense; extended absences are those in excess of 10 working days per month, including annual leave, sick leave or those due to part-time or telework schedules. This expense may not be used to calculate total commuting costs via HHS’ transit subsidy benefit application.
  • Van pool participants must ride in the van pool at least 50 percent of their eligible working days each month in order to receive the monthly benefit.
  • Van pool participants are not eligible to receive assigned facility parking or parking subsidy benefits and a transit subsidy benefit.
  • While not all riders in the van pool must be federal employees, non-federal van pool riders cannot receive federal subsidies and must pay out-of-pocket. All van pool members, whether federal employees or not, must pay the same rate for the same van pool services.
  • In the event a transit program receives a rider subsidy from a transit authority, the appropriate participant offset must be applied to the individual monthly benefit amount.
  • A van pool invoice or receipt is required to document the actual commuting cost for individual van pool participants.

Van Pool Roles

Federal Van Pool Driver
An individual owner or transportation servicer of a qualified IRS van pool and/or a federal employee operating a vehicle. The federal van pool driver may be the primary member listed for qualified parking.

Federal Van Pool Coordinator
An individual having primary responsibility as identified through a contractual relationship with the van pool provider. The federal van pool coordinator may be the primary member listed for qualified parking.

Federal Van Pool Provider
An entity which contractually offers the use of a vehicle (van) to a federal van pool coordinator meeting the van pool qualifications set forth in 26 CFR Sec. 1.132-9 26.

Van Pool Rider
All participants in a van pool.

Establishing a Van Pool

The PSC Transit Subsidy Benefit Program Office will review van pool documentation for the purpose of:

  • Validating costs and ridership to calculate transit subsidy benefit amount
  • Auditing ridership to ensure van pool meets 80/50 rule Auditing balances to ensure there is not an accumulation of excess transit subsidy benefits

However, it is the employee’s responsibility to ensure van pool charges reflect reasonable costs and profits. For example, employees must ensure that the monthly van pool fare is based on some reasonable methodology (e.g., the average daily round-trip mileage and the number of riders). Employees must ensure that van pool rates reimbursed with the transit benefit are the same for all passengers within approximately the same commuting route and distance. Rates may be reduced or waived for the driver, who is not eligible to receive the transit benefit.

Van pool participants voluntarily select the van pool in which they would like to participate. The agreement is a personal agreement between the participant and the van pool vendor/company, and not an agreement between the van pool vendor/company and HHS.

HHS policy requires employees to purchase the most cost-effective combination of transit fare media available. Thus, it is advisable for employees considering a van pool to explore and compare a few options. Consider the following factors when making a decision about what type of transit to use:

  • Ridership: Are there enough riders to ensure that the 80/50 rule is met on a daily basis? If not, all participants will not be eligible for a subsidy that month and will have to pay out of pocket.
  • Cost: Secure quotes from a few vendors. The costs of many commutes exceed the cost of the transit subsidy benefit maximum and participant will cover out of pocket cost.
  • Subsidy benefit amount: The benefit amount may go up or down. Either way, if the van does not have enough riders, participants will have to pay for the full van out of pocket, as they will not be eligible for the tax-free subsidy.

Participants should negotiate a contract to lease a vehicle with the vendor of their choice. The contract usually consists of two types of costs:

  • Base cost of running the van (based on the number of passengers, mileage, etc.). The base cost is a set fee the van pool must pay every month for use of services regardless of number of passengers.
  • Variable (fluctuating) cost of running the van pool, such as the cost for gas and tolls.

Identify a Van pool Coordinator

It is recommended that the van pool members identify a van pool coordinator to register the van pool with PSC’s Transit Subsidy Benefit Program Office and to provide PSC with regular updates.

Identify a Primary Driver

The PSC Transit Subsidy Benefit Program Office recognizes that driving may be a shared task. Per federal legislation, the primary driver of van pools who use qualified parking are not eligible for transit subsidy benefits. Thus, a primary driver must be named. The driver is not eligible for transit benefits, however, the allowable cost for the driver may be covered as part of the operating expenses attributed to the van pool.

Van Pool Rider Responsibilities

HHS employees participating in the Federal Transit Subsidy Benefit Program are eligible to receive an amount equal to their actual monthly commuting cost, not to exceed maximum allowable benefits, for utilizing mass transit, to include van pools.

Employees are still required to self-certify for their monthly benefits in accordance with the following guidelines:

  • Van pool riders will apply for their monthly transit subsidy benefit via HHS’ online application, selecting Van Pool as their mode of commute.
  • Van pool riders must ride in the van pool at least 50 percent of regular workdays (as defined by the Office of Personnel Management) per month to receive the monthly benefit.
  • Van pool riders are not eligible to receive assigned facility parking or parking subsidy benefits.
  • Van pool riders may not use benefits to “hold” their space in a van pool during an extended absence. The cost of holding a seat is considered an out-of-pocket expense.
  • Extended absences are those in excess of 10 working days per month, including annual leave, sick leave or those due to part-time or telework schedules.
  • Out-of-pocket expenses may not be used to calculate total commuting costs via HHS’ transit subsidy benefit application.
  • Van pool riders should not establish automatic bill pay with their GO!card®, as their payment amount could fluctuate monthly. If a GO!card® transaction fails because participant does not monitor their credit limit and a vendor attempts to charge more than is available, no adjustments will be made and the participant will have to pay out of pocket.
  • Van pool riders should ask their van pool coordinator for monthly costs, validate costs, and ensure that surplus benefits are not accumulating on their van pool account.
  • Out of pocket expenses may not be used to calculate total commuting costs via HHS’ transit subsidy benefit application.
  • Van pool riders will be automatically withdrawn from the program after 60 days of inactivity.
  • Van pool riders must adjust their subsidy amount if their ridership does not meet requirements. If rider does not adjust subsidy amount, the rider will be required to reimburse his/her agency.
  • Van pool riders should understand regulations and procedures associated with receiving a transit subsidy benefit to ensure that their benefit is not suspended.

Van pool Coordinator Responsibilities

The Van pool coordinator provides the PSC Transit Subsidy Benefit Program Office with:

  1. Van pool Coordinator data, updated as necessary, to include:
    • Ownership company or leasing agent (van pool company)
    • Business address, phone number and email address
    • Primary coordinator name, phone number and email address
  2. Provide HHS with a detailed lease and invoice of monthly vehicle expenses upon which rates are set; limited to leasing fees, tolls and fuel charges, to be compared with rider rates to verify Fair Market Value (FMV).
  3. If not noted on lease or invoice, inform the PSC Transit Subsidy Benefit Program Office of subsidies offered by organizations, municipalities, and/or their van pool provider.
  4. Provide van pool roster to PSC Transit Subsidy Benefit Program Office, and identify participant roles.
  5. Identify one participant as the Primary Driver who will not be eligible to receive transit benefits.
  6. Provide physical location of vehicle parking (work destination), if not assigned HHS preferred parking.
  7. Inform participants of their monthly van pool cost, adjusting upward or downward as appropriate.
  8. Inform participants not to establish automatic bill pay with their GO!card, as their payment amount may need to be adjusted monthly.
  9. Ensure that monthly costs not covered by the transit subsidy benefit are paid in full monthly and are the responsibility of van pool participants. Ensure that balances carried over from previous months will not be included in the calculation for transit subsidy benefits.
  10. Maintain and provide, as requested, daily ridership logs, annotating HHS employees:
    • Notify PSC Transit Subsidy Benefit Office of rider inactivity for any periods in excess of 10 days.
    • Notify PSC Transit Subsidy Benefit Office of rider inactivity in excess of 60 days.
  11. Verify excess transit subsidy benefit accumulation on Leasing Agent accounts and gas cards not to exceed $200. If credit exceeds $200 twice within one fiscal year, participants will be suspended from the program for two months.
  12. If credit exceeds $200, participants’ Agency Transit Coordinator(s) will determine the process for recuperating excess money and track through to completion.
    • Inform Agency Transit Coordinator and PSC Transit Subsidy Program Office that participant benefits are suspended until credit is exhausted.
    • Repay agency via www.pay.gov.
      • Include copies of emails.
      • Provide invoices before and after payment to StaffDiv/OpDiv.

Van Pool Documentation

  • Van pool coordinator or participant must email a copy of the lease agreement, invoice, and van pool roster to PSCTranshareProgram@psc.hhs.gov.
  • PSC will add van pool company and van pool coordinator to drop-down menu on the Transit Subsidy Benefit Application.
  • The Transit Subsidy Benefit Application will be prepopulated with van pool cost to automatically calculate the employee’s monthly commute cost and the employee’s transit subsidy benefit. Appropriate costs include lease, gas and tolls. Miscellaneous vendor expenses should be covered in the lease amount.
  • Participants will receive an automated email as participants join/leave their van pool informing them of their adjusted transit subsidy benefit and GO!card credit limit.
  • Participants should not use Reoccurring Automatic Payment feature, as this does not allow for participants to adjust monthly payments based on fluctuating van pool costs.

Ridership

If van pool participation falls below minimum ridership as established by 80/50 rule, then:

  • All van pool participants’ GO!card credit limits will be reset to $1 for the number of months that ridership did not meet the 80/50 rule
  • After 60 days, participants will be automatically withdrawn from the program.

Costs

The PSC Transit Subsidy Benefit Office will provide all Agency Transit Coordinators with a list of registered van pools that includes vehicle information, commute distance, and costs. OpDivs/StaffDivs may use this data to establish transit subsidy maximum benefit limits.

PSC will review invoices to ensure that surplus funds are not be stockpiled in a van pool account; to ensure all participants are paying the same amount; and to ensure van pools meet the minimum requirements.

Online Resources to Find Van Pools

Van Pool Contact Information

For questions about the van pool program, please contact the PSC Transit Subsidy Program Office via email at PSCTranshareProgram@psc.hhs.gov.