FSA HealthCare Safe Harbor?

[Guest Phil C]

Met with a company that has 48 employees. Five participate in the FSA HealthCare Account and of course all five are the HCEs- CEO, VPs Controller. No rank and file employees. The HR person indicated the outgoing CFO said they did not need discrimination testing as they were in Safe Harbor, like the 401K. Is there safe harbor for FSAs? Are they confused or am I missing something?

Thanks

Phil

[Guest Phil C]

Figured out Safe Harbor does not apply to Health FSAs...

Health plan safe harbor

In addition, there is a contributions and benefits test safe harbor for group health plans — but not dental

or health FSAs. The safe harbor applies if the contribution on behalf of each participant equals 100 percent

of the cost of health coverage of the majority of similarly situated HCPs, or at least equals 75 percent

of the cost of health coverage of the similarly situated participant with the highest cost health coverage

under the plan (Treas. Reg. §1.125-7(e)(1)).