If established under objective business criteria, bona-fide employment-based classifications that do not discriminate in favor of "the prohibited group" may be a reasonable classification of employees.
Under federal law, employer provided benefits eligible for tax exclusions are subject to numerous nondiscrimination provisions. These provisions all are based on one important condition: ensuring executives, key employees or other highly paid individuals ("the prohibited group") are not treated more favorably than other employees.
|When to perform testing
Nondiscrimination testing is a necessary function of providing a cafeteria plan, and under the 2007 proposed regulations, Code Section 125 nondiscrimination tests are required to be performed annually, as of the last day of the plan year.
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