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Nondiscrimination Tests


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A company self-insures its medical plan. It wishes to provide coverage to a group of employees (predominately highly compensated) without requiring them to pay a portion of the premium (which it requires other employees to do). Can it require the group to pay the same premium co-pay but then gross up the premium co-pay and pay it as taxable compensation in the same pay check? What is the risk that the IRS will view this as evading the nondiscrimination tests?

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