Decision Path
- Is the interest interest in discrimination limited to employee benefit plans? If so, continue. Also, is your interest limited to IRC-defined discrimination? If so, go to Step B. Does it extend to discrimination defined by other statutes? If so, go to Step H.
B. Select the Employee Benefit Plan to be Tested:
- Medical Reimbursement Plan (including the Health Reimbursement Account) as goverened by IRC Section 105 (h). Go to C.
- Cafeteria Plan which includes (a) Full-Flex, (b) Flexible Spending Account and (c) Premium-Only Plan as governed by IRC Section 125. Go to D.
- Dependent Child Assistance Plan as governed by IRC Section 129. Go to E.
- Life Insurance as governed by IRC Section 79. Goto F.
- Qualified Deferred Benefit Plan as governed by IRC Section 410. Go to G.
C. IRC Section 105(h)
Two options are available: (a) use the Safe Harbor Test (if so, go to Step 1) or (b) go directly to Database Testing (if so, go to Step 2)
- Submit the Data Transmittal Memorandum for the Discrimination Testing – IRC Section 105(h) – Safe Harbor Test to www.awpse.com through Actuarial Work-Products, Inc. for processing. Note: direct data entry by the End-User (or its intermediaries) is encouraged. Two results are possible:
a. Test passes. Stop. Plan is nondiscriminatory.
b. Test fails. Stop. Proceed to Step 2.
- Enter the requisite data as provided by www.awpse.com and obtain the testing results (i.e., a risk/actuarial work-product) as an e-mail. The result will be that (a) the Plan passes (if so, the Plan is nondiscriminatory) or (b) the Plan fails and remediation is required.
D. IRC Section 125
Two options are available: (a) Use the Safe Harbor Test (if so, go to Step l or (b) go directly to the Database Test (if so, go to Step 2).
- The Safe Harbor Test will provide these tests results: (a) the Eligibility and the Benefits and Contributions Tests both pass (if so, the testing should be stopped as the Plan is nondiscriminatory), (b) the Eligibility Test fails but the Benefits and Contributions Test passes (if so, the Database Test described in Step 2 should be used) or (c) the Benefits and Contributions Test fails (regardless of the results of the Eligibility Test) (if so, stop because Plan remediation is necessary).
- Enter the requisite data as provided by www.awpse.com and obtain the testing result (i.e., a risk/actuarial work-product) as an e- mail. The result will be that (a) the Plan passes (if so, the Plan is non-discriminatory) or (b) the Plan fails and remediation is required.
E. IRC Section 129
The same protocol is used for Section 129 as was used for Section 125.
