Discrimination Testing for Sec. 125 POP

[Guest Aaron E]

A client feels they may be discriminating against their Hourly, non-exempt workers since they and their Salaried workers "run" their payroll deductions through a Sec. 125 Premium-Only Plan but their Salaried workers enjoy a shorter Waiting Period (30 days)versus their Hourly workers (90 days).

I'm confident they are not discriminating but would like some direction to prove my point. Any help is appreciated!

[SLuskin]

I thought that the eligibility had to be the same for everyone, of if not, that it did not favor a category of employees that was "highly compensated". So, if you have no highly compensated hourly ees and highly compensated salaried ees, you may have some trouble.