United Benefit Advisors Insight and Analysis Blog

Answers to the Top 4 Questions about Section 105(h) Nondiscrimination Testing

Posted by: Danielle Capilla    Jun 6, 2017 8:30:00 AM

Under Internal Revenue Code Section 105(h), a self-insured medical reimbursement plan must pass two nondiscrimination tests. Failure to pass either test means that the favorable tax treatment for highly compensated individuals who participate in the plan will be lost. The Section 105(h) rules only affect whether reimbursement (including payments to health care providers) under a self-insured plan is taxable.

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Topics: employee benefits, nondiscrimination testing, IRS Code Section 105(h), self-insured medical plan