November 21, 2024
Welcome to a nondiscrimination testing party! Join our party planning team as we break down the essentials of welfare benefit nondiscrimination testing:
- What’s on the menu? (Major medical coverage, health FSA, DCAP, etc.)
- Who’s invited? (Employees, maybe highly compensated employees, but not independent contractors)
- Who gets to eat? (Eligibility and benefits tests)
- When to party? (Testing timing)
- What to do if the party gets out of hand? (Addressing a discriminatory plan design)
This lively session is filled with real-world examples and practical tips to help you understand the FUNdamentals of nondiscrimination testing.
Agenda
Nondiscrimination Core Concepts
- Tests generally fall into three categories:
- Eligibility
- Availability
- Utilization
- Objective vs. Subjective Tests
- When to Test
- Scenarios/Examples
- Cautionary Tales
Key Takeaways
Employer Considerations
- Test Early
- Conduct tests early to allow for time to make any appropriate adjustments.
- Offer Benefits Equitably
- Consider employee population, waiting periods, and other imposed limitations.
- Evaluate Eligibility
- Expanding benefits to previously excluded groups could be helpful.
- Consider a cost/benefit analysis.
NFP Benefits Compliance Resources
For further information, please ask your broker or consultant for a copy of the NFP publications Sections 105 and 125 Nondiscrimination Rules: A Guide for Employers, Section 129 Dependent Care Assistance Program Nondiscrimination Rules: A Guide for Employers, Quick Reference Chart: Nondiscrimination Rules.