With the cost of a gallon of gas heading towards $5, you're no doubt hearing about the pain from your employees.  With that in mind, there's no such thing as a bad idea when it comes to thoughts to provide cost relief to commuting employees. 

Would you believe there is such a thing as a "Flexible Spending Account" for commuting costs?

It's got limited application, but it's there.  From Jerry at the Retirement Plan Blog:

"There is a way employers can help employees put more dollars in their paychecks at no additional expense to them. In fact, tax savings are available to both employers and employees.

So what is it, and how does it work? It’s an oft forgotten program that allows employers to offer employees the opportunity pay for certain transportation expenses on a pre-tax basis under Internal Revenue Code Section 132 and the Transportation Equity Act for the 21st Century (TEA-21).

Qualified transportation expenses generally include payments for the use of mass transportation, e.g., train, subway, bus fares), and for parking. Amounts are indexed for inflation. For 2008 the maximum monthly pre-tax contribution for mass transit is $115.00, and $220.00 for parking.

And there’s one more goodie. While Section 132 benefits are similar to the pre-tax flexible spending accounts available for medical expenses and dependent care under Section 125, there’s one important difference. The transportation benefit does not include a "use it or lose it penalty," as required with medical/dependent care flexible spending accounts."

If you deal with FSA's, you know Pre-tax means before income taxes and FICA, which is valuable to employees because they effectively increase take-home pay. A more minor benefit goes to your company since the employer avoids paying its share of FICA.

If you've read this whole post, you're probably thinking a lot like me.  It's a great benefit on paper, but doesn't help those who are driving to work, which seems like it covers 99% of America.  Still, if you are in a metro area, it's a good benefit to publicize to your workforce if public transit exists, or if you're in the core metro area where employees have to pay for parking.

I can't really advocate for expanding this FSA type program to the cost of gas for a personal vehicle.  I think to really impact the problem, we need to turn to telecommunting and other options.  Perhaps expanding the FSA-like benefits for the cost of fuel for employees who carpool?