Seasonal employee exclusion

[Guest cshade]

Hello all. I read a few posts on this subject from a few years ago, but I'm still not clear on this.

I have a broker with two groups that wants to set up one POP and one POP/FSA plan for these two groups. The group employees hundreds and at times 1000’s of seasonal employees. Some of these seasonal employees work full time, year round but are still considered seasonal, and are not eligible for their underlying benefits. They basically want to set their plans up for the office and sales employees and exclude all seasonal employees from the POP and FSA (their definition of seasonal employee has been recorded in their corporate minutes and is used to define who is eligible for their healthcare) .

Is it okay to exclude all of their 'seasonal' workers. Also, does the 'definition' of seasonal employees found in TREAS. REG. § 1.105-11 (1981) " ....any employee whose customary weekly employment is less than 25 hours or any employee whose customary annual employment is less than 7 months may be considered as a part-time or seasonal employee" overridge their definition of seasonal employees?

Lastly, if they are excluded from participating, are they also excluded from the testing? Thank you for any insight on this issue.