What tests does Group Dynamic include with its POP and FSA services?
Upon receipt of a completed Non-Discrimination Testing worksheet, Group Dynamic performs the following IRS Code Section 125 and 129 tests:
- 25% Key Employee Concentration Test (POP and FSA services)
- 55% Dependent Care FSA Average Benefit Test
- 25% Dependent Care FSA Concentration Test
The following tests are available with our Comprehensive Non-Discrimination Testing service:
IRS Code Section 125 Tests:
- Eligibility Test
- Safe Harbor Percentage Test
- Contributions & Benefits Test (Availability and Utilization)
IRS Code Section 105(h) Tests:
- Non-Discriminatory Classification Test
- 70% Test
- 70%/80% Test
- Benefits Test
IRS Code Section 129 Tests:
- Eligibility Test
- Contributions and Benefits Test
What are the consequences of a discriminatory plan?
When a plan is found to be discriminatory, the applicable benefits become taxable to the highly compensated/key participants. Participants that are not considered to be highly compensated or key are not impacted by a discriminatory plan.