When is ACA Non-Discrimination Testing required?

ACA Non-Discrimination Testing is required annually for health and welfare benefit plans. These tests ensure that the plans do not discriminate in favor of highly compensated employees (HCEs) or key executives, as mandated by the Affordable Care Act (ACA). The testing aims to maintain fairness and equitable treatment among all employees by preventing plans from providing excessive benefits or favorable treatment to HCEs compared to non-HCEs. Employers must conduct these tests each plan year to ensure compliance with the ACA's non-discrimination requirements and avoid potential penalties for non-compliance.

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