Participation Standards

[Guest ahk1313]

Health Plans:

We have a health plan that is qualified under section 401(a). The eligibility requirements state that you have to be a salaried employee to qualify. Do the minimum participation standards apply to the health plan? If so, when an hourly employee works over 1,000 hours in an employment year are they entitled to benefits even if they do not change status to salaried? Is there case law to substantiate this claim? Does the IRS view this circumstance as a denial of benefits? If so what do we do with employees that work more than 1,000 hours in an employment year and do not change status? Are we liable for denying benefits? Case law?