Benefits provided for HCE's outside of cafeteria plan

[jkharvey]

The employer has a cafeteria plan that provides for health insurance. The employer pays a portion of the premiums and the balance of the premiums are paid by employees with before tax dollars as part of the cafeteria plan. Because the plan failed discrimination in years past, the employer has taken to paying the entire premium for the owners (4 doctors). The employer claims that since nothing flows through the cafeteria plan for these HCE's there is no discrimination and this benefit does not need to be included when testing for discrimination. This just doesn't smell right. Can they do this? Does this present some other problem?