Current regulations require Section 125 Plans (Premium Only and FSA plans) to pass Non-Discrimination Testing (NDT). The goal of this testing is to ensure that those Key and/or Highly Compensated employees identified by the employer, are not participating in the Section 125 plan at a disproportionate rate.

As part of FSA and POP administrative services, Proficient Benefit Solutions has always conducted two crucial Non-Discrimination Tests upon request: the 25% Key Employee Concentration test and the 55% Average Benefits test of the Dependent Day Care program.

For those clients who would like us to perform a more comprehensive test of the Section 125 plan we have an additional option that incorporates a total of nine tests. These nine tests are grouped together and comprise one test “package”. Some of these tests address the eligibility and availability of benefits, while other tests evaluate and compare the actual benefits elected (utilization).

Each Comprehensive Test Package includes

The Section 125 Cafeteria Plan

  1. Eligibility Test
  2. Contributions and Benefits Test
  3. Key Employee Concentration Test

Health FSAs

  1. Eligibility Test
  2. Benefits Test

Dependent Care FSA (DCAP)

  1. Eligibility Test
  2. Contributions and Benefits Test
  3. More-Than-5% Owners Concentration Test
  4. 55% Average Benefits Test

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