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Contributions and Benefits Test


dmwe
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Hi all,

When running the Contributions & Benefits test, do you add up all pretax contributions (Ins. premiums, HSA, FSA, DCA, LPFSA) together and then test the HCEs vs. NHCEs, or do you just use a shorter list of contribution types?

Thanks

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@dmwe I believe the FSA TPA vendors (that are generally the entity tasked with performing these cafeteria plan NDT) include all of the benefits run through Section 125 (i.e., all 125-qualified benefits for which the employer permits a pre-tax employee contribution) in one amount lumped together.  So H&W premiums run through the POP, FSA, and HSA all as one.

As long as they haven't structured contributions in a discriminatory manner by violating the uniform election rule, it's extremely unlikely to fail the C&B test.  It's really only the 55% average benefits test component of the dependent care FSA that's typically a concern.

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