Group health plans and tax-favored accounts—including health savings accounts (HSAs), health flexible spending arrangements (health FSAs), and health reimbursement arrangements (HRAs)— are subject to numerous nondiscrimination provisions under federal law. As a result, employers that wish to adopt arrangements which exclude certain classes of employees from group health plan coverage or offer different benefits or contributions to different classes of employees (e.g., managerial vs. non-managerial) must analyze these arrangements under several laws to determine whether such treatment is permissible. The following provides a summary of key nondiscrimination requirements that may apply to group health plans and tax-favored accounts under federal law. (Be sure to check your state’s laws, as additional rules may apply.)

Due to the complexity of the law in this area, any employer that is considering offering health benefits to onlu certain classes of empliees (or offering different benefits or contributions to different groups of employees) should consult a knowledgeable benefits attorney or specialist for gusidance regarding its plan(s) and the specific nondiscrimination provisions that may apply.

For more details, download Non Discrimination & Classing Rules for Health Plans: An Employer’s Guide.

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