Which test would an employer use for discrimination testing for waiting period and contributions?
There are two components to the new non-discrimination requirements for fully insured plans that a plan must pass: (1) the Eligibility component and (2) the Benefits component. a. The plan must benefit at least 70 percent of all employees. Example: Company has 100 employees; 75 are participating (i.e. benefiting) in the plan. Since at least 70 percent of all employees are benefiting, this plan passes the test. OR b. b. A total of 80 percent of the 70 percent that would be eligible are benefiting from the plan. Example: There are 100 employees. 75 are eligible but only 60 are participating. In this example, you have more than 70 percent eligible for the plan and since 60 employees are participating (which is greater than 80 percent benefiting of the 70 percent that is eligible), this plan passes the test. (2) Benefits c. All benefits provided to highly compensated employees (HCIs) who are participants in the plan must be provided to all other participants. Also, all the benefits availab
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