Do commuter benefits need COBRA notices?

No. COBRA continuation coverage generally does not apply to commuter benefits under the federal commuter benefit rule (§132(f)). COBRA covers group health plans (medical, dental, vision, FSA in some cases). Commuter benefits are a fringe benefit under §132, not a group health plan, so the standard COBRA election notice isn't required.

What does apply

Plans must follow their own termination procedures. Alice notifies departing employees of their run-out window. That is the limited time after termination when remaining commuter dollars can still be used for qualifying commute expenses already incurred.

When the employee leaves

Through payroll integration, Alice picks up the termination event. New payroll contributions stop. The employee gets a notice of the run-out period. Alice Card is deactivated per the plan rules.

What employees should know

Unspent balances can't be cashed out (federal rule). Used dollars stay used. The employee should plan their last election before leaving to right-size their commute spending. See what happens to my commuter balance if I leave my job for departing-employee guidance.

What employers should know

You don't need to issue COBRA notices for commuter benefits. Standard offboarding (final paycheck, benefit termination notices) handles it. Some state laws have their own final-paycheck rules for unused balances; see final paycheck rules for commuter balances when an employee leaves.

For the full list of eligible spending, see what parking and transit expenses are eligible.

Documentation

Alice retains contribution and termination records for the standard recordkeeping window (typically three years). That supports any later audit or employee inquiry.

Need help?

Email admin-support@thisisalice.com or call (929) 552-4625.

Specific benefits, election rules, and run-out periods depend on your employer's plan design. Check with your HR team or plan administrator for details.

Alice does not provide tax, legal, or financial advice. Consult your own tax preparer, lawyer, or financial advisor for guidance specific to your situation.

Pretax Hero Visa Commercial Card is powered by Stripe and issued by Celtic Bank. Program funds held at Fifth Third Bank, N.A. (Member FDIC). Use of card and program is subject to the cardholder terms and related agreements presented at issuance.