Health FSA and Controlled Groups - Coverage and Discrimination Rules

[Guest MIKEZ]

One of the employers from a controlled group of corporations wants to sponsor a health FSA for its employees only. What coverage and discrimination requirements apply?

[Guest AHayhow]

Did you ever receive a response to this question? If so, could you share with me? Thanks

[SLuskin]

You have to test the whole controlled group as if it were a single employer. So, you might have some problem with the eligibility test and the availability test. How many employers are involved in this group, and how many employees in each? Are there more highly comp in the group that wants the flexible spending accounts?

[Guest AHayhow]

Actually there are only two groups and they were split to be highly comp in one group and non highly comp in another group. They only want to offer the FSAs to the non highly comp. group so that they can pass the tests.

Thanks for your help.