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Benefits Test for Non-Discrimination

To ensure that benefits under a plan do not favor highly-compensated employees, companies can test the plan design and plan operation.

Testing Plan Design for Non-Discrimination

To test the plan design for compliance under the Affordable Care Act's non-discrimination rules, determine whether or not the following items are true.

  • Employee contributions must be identical for each benefit level.
  • If the plan establishes a maximum reimbursement for any single benefit or combination of benefits, that level cannot vary based on compensation, age, or years of service.
  • All benefits available to highly-compensated employees must also be offered to all other participants.
  • Plan(s) cannot impose different waiting periods for employees.
Testing Plan Operation for Non-Discrimination

Testing plan operation for non-discrimination is uncommon on a company-level, as discrimination at an operational level is usually on the insurance carrier end. An example of this would be if a claim were approved for a highly-compensated employee but were denied for a regular employee.

However, if an employer offers an HRA, they are required to approve claims the same way for regular employees as they would highly-compensated employees.


  • Zenefits does not  perform non-discrimination  testing.
  • This provision is enforced via "non-discrimination  testing"

  • Non-discrimination  testing is performed for two different categories of employees: Key Employees and Highly Compensated Employees (HCEs)
    • Non-discrimination  testing for Key Employees is performed using the Top-Heavy test.
    • Non-discrimination  testing for HCEs  is performed using the ADP and  ACP  Tests .
    • Employers with safe-harbor  plans are typically exempt from the ADP test

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