Highly comp Employee Question?

[Guest KD40]

A person needs to make over $85000 in the previous year in order to be a HCE for the current year, correct? That means 85000.01?

An employee who made $85000 exactly would not be considered highly, is what the question boils down to?

[Tom Poje]

you are correct.

the same applies to ownership, it must be more than 5%

[jaemmons]

Caveat...

Unless the employer elects to use the "top paid" group option before the beginning of the current plan year. Then the employee would need to earn over the comp limit AND be among the top 20% of the employer's ee's ranked by compensation.

[Blinky the 3-eyed Fish]

CAVEAT 2 - "the return of the technicality"

The top 20% nonexcludable employees (not the same nonexcludables as coverage testing).