Metro will delay SmartBenefits changes by one year

Metro will postpone SmartBenefits changes for one year, iMetro reports.

General Manager John Catoe announced the decision last night at the Prince George’s budget forum, which iMetro also attended. He reports that Catoe said Metro reached the decision on Tuesday. The “three purse” system will not go into effect January 1 after all, and the old system will stay in effect throughout 2010. Metro can then spend the extra year finding a better solution to the IRS issues.

This is good news. Unfortunately, it might be too late for some, as many employees had to make their January elections already, and some companies canceled their SmartBenefits program entirely. Hopefully Metro plans to put out a press release about this today, and proactively communicate this to employers.

Update: According to another attendee at that meeting, Catoe also said that Metro got permission from the IRS to keep unused SmartBenefits in the employee’s “purse” instead of refunding it to employers. The IRS is requiring the separate purses, but not the “use it or lose it” provision, bearing out what some commenters said. The IRS further gave Metro permission to delay implementation for one year.

As we’ve discussed before, the delay might alleviate the immediate SmartBenefits problem, but while Metro was working on this system which they can’t even launch, other changes that could have opened up valuable options for closing next year’s budget gap got delayed without notice. I hope Catoe will address this issue and explain how they will involve the public to a larger extent in the design of the SmartBenefits system for next year and other SmarTrip features.