Below is a good lay person's summary of the new benefit:

http://www.trailnet.org/bikecommutertax.php

It is similar to the the commuter/parking benefit that has been in place for a number of years. It is about time Congress recognized that we should encourage bike commuting, and obviously more needs to be done to get us away from our car-centric transportation system. (Has anyone in power actually used public transportation?) However, I can appreciate the response from your company to some extent given these trying economic times.

Since your company uses an outside vendor to administer this program, there is a cost to the company of adding this benefit. (Doing anything different from the vendor's norm can result in substantial costs.) In this time of frozen pension plans, suspension of company matching contributions to 401(k) plans, and increasing health costs for both employers and employees, the HR/benefits department probably is trying to control costs while still providing what are viewed as essential benefits for most employees (401(k) matching contributions, health coverage).

I hope that your company adds the bike benefit later this year! Mine has yet to do so (but I keep asking).