The Internal Revenue Service prevents cafeteria plans, self-insured health plans (including health flexible spending arrangements), and dependent care assistance programs from discriminating in favor of highly compensated or key employees. The plans must pass annual tests on specified eligibility, benefits, and utilization requirements. If these requirements are not met, highly compensated and other key employees would face increased taxable income. Additionally, as part of the Affordable Care Act, it is expected that nondiscrimination testing will be required for fully insured health plans.
“Performing nondiscrimination testing with spreadsheets and manual calculations is labor-intensive and potentially error-prone,” said Jim Fegen, senior vice president of product development, Tax & Accounting business of Thomson Reuters. “Through our alliance with Claims-X-Change, we’re now able to offer Checkpoint subscribers an accurate, cost-effective, and automated way to conduct nondiscrimination testing. This tool complements our existing guidance on nondiscrimination testing, available under our EBIA brand.”
Thomson Reuters’ agreement with Claims-X-Change offers Checkpoint subscribers:
- Direct access within Checkpoint to quickly locate any test;
- The ability to set up multiple users at no additional cost, including an unlimited number of employer log-ins to facilitate employer self-service;
- Targeted hyperlinks to related EBIA guidance on Checkpoint (with an EBIA subscription);
- Access to Microsoft Excel templates that make it easy to gather employer data for testing in a consistent, usable format;
- Reports that can be attached to a client’s file to help establish due diligence;
- Recommendations to resolve problems identified during testing;
- Ability to accurately and automatically identify highly compensated and key employees; and
- Ability to archive and retrieve historical input data and test reports for audit and re-use purposes.
“Our alliance with Thomson Reuters delivers the most comprehensive nondiscrimination testing solution for employee benefit plans,” said Sarinder Chhabra, president and chief executive officer, Claims-X-Change LLC. “I’m pleased that Thomson Reuters selected Claims-X-Change to offer state-of-the-art, automated, productivity tools. We look forward to reducing compliance costs and offering additional revenue opportunities for customers.”
The tool is accessible through Thomson Reuters Checkpoint service, which can be found here.