Hello-
I'm hoping some of you could point me in the right direction with regard to the Retiree Safe Harbor provision under 26 C.F.R. § 1.105-11(c)(3)(iii). My understanding is that an HRA provided to retired or retiring employees are not subject to Section 105(h)'s nondiscrimination rules, unless one of the retired/retiring employees is a participant, where the plan must then provide the same "type of benefits" and "dollar limitations" for all other retired participants.
What if the HRA plan is provided exclusively to highly compensated individuals (i.e., only retired HCIs are "participants")? My understanding of 26 C.F.R. § 1.105-11(c)(3)(iii) indicates that this would be permissible so long as the same type of benefits and dollar limitations are provided to all other retired participants, even if the plan's participants are made up exclusively of HCIs.
Is there any IRS/Treasury guidance discussing the scope of 26 C.F.R. § 1.105-11(c)(3)(iii)? Is there any reason to think that the above interpretation is wrong? I understand that this is inconsistent with most, if not all, other nondiscrimination rules for self-insured plans, but I'm hung up on the "retired participants" language under 26 C.F.R. § 1.105-11(c)(3)(iii).
Thank you!
