105(h) nondiscrimination in benefits

[Guest Kathleen Meagher]

Not really a cafeteria plan question, but....

For purposes of the nondiscrimination in eligibility test under 105(h), employees in a collective bargaining unit may be disregarded. However, the regulations don't say that these employees may be disregarded for purposes of the nondiscrimination in benefits test.

Does this mean that a 105(h) plan for union employees needs to be concerned about benefits discrimination? My client has a union plan that contributes unused sick leave to reimbursement accounts for retirees. Since the dollar amount available for reimbursement would be higher for higher-paid employees, this program could be discriminatory if union employees are not disregarded.