Certain employee benefit arrangements maintained by private employers are subject to nondiscrimination testing to ensure that the benefits offered under the arrangement do not disproportionately favor highly compensated and key employees. These rules generally apply to self-funded health plans, cafeteria plans and retirement plans. Our professionals are experienced in testing self-insured health plans for compliance with the rules set forth under Section 105(h) of the Code, as well as performing the key employee concentration test for cafeteria plans.
Trest’s nondiscrimination testing services with respect to retirement plans, includes minimum coverage testing, the average benefits test, the general test and the ADP/ACP tests for plans with an elective deferral feature. We also recommend plan designs that allow the plan to avoid annual testing, such as safe harbor 401(k) plans, simple cafeteria plans, or design plans to use a design based safe harbor permitted under the Code, such as uniform allocation of profit sharing contributions. We also analyze affiliate service group and controlled group status, as well as whether a client has separate lines of business.