Nondiscrimination Testing

Employers that intend to have Alerus perform nondiscrimination testing for the current plan year are required to:

• Determine which testing package is needed.
• Review the testing process below.
• Submit the following completed documents to Alerus no later than six months after the start of the plan year.
  • Testing Questionnaire – verify your company’s entity type and possible restrictions.
  • Testing Data Template – provide accurate, detailed data on your employees and their benefits. Ensure all columns are populated; missing data may result in delayed testing conclusions.
    • Your company may use certain criteria to classify employees as part- or full-time but for testing purposes, any employee with less than 35 hours in the “hours worked per week” column will be considered a part-time employee.
    • For the “customary months worked per year” column, anyone with less than nine months will be considered a seasonal employee for testing purposes.
    • For the “subjective questions,” the second worksheet tab on the testing data template, answer yes or no to each question.
    • It is critical that you complete the testing data template with accurate information and do not modify the format in any way.

1. Log in to the Alerus employer website.
2. Select Requests>New Request.
3. Choose “Other” for Request Type.
4. Under Details, enter “MM/DD/YYYY-MM/DD/YYYY Nondiscrimination Testing Data.” Dates entered should be the start and end date of the plan year.
5. Select Browse and attach the nondiscrimination files.
6. Select Submit.

If we do not receive the mid-year testing questionnaire and testing data template by the required deadline of six months after the plan year starts, we understand you are waiving the option of having Alerus perform the nondiscrimination testing for the current plan year.

Initial Mid-year Testing

• Mid-year testing data must be submitted to Alerus no later than six months after the plan year starts. The initial mid-year testing data is required to include:
  • All employees who worked during the plan year (even if they had no applicable benefit amounts).
  • All applicable benefit amounts that occurred from the start of the plan year, to date, as well as estimated additional benefit amounts that will occur through the end of the plan year.

Mid-year Testing Pass

• If the plan is passing with no apparent risk of failure within the plan year, no further mid-year testing is required.
• After the initial mid-year testing passes, if benefit changes occur, employers will need to monitor these changes during the plan year. They may contact Alerus to request additional mid-year testing before plan year end if necessary. Benefit changes include but are not limited to:
  • Increase or decrease in employment or benefit participation
  • Merger or acquisition
  • Changes to benefit plans

Mid-year Testing Failure

• If the plan is failing or near failing, modifications to the plan and retesting may need to occur before the end of the plan year. Employers may make recommended changes to the plan as soon as reasonably possible (and before the end of the plan year). Once the recommended changes have been made, employers may contact Alerus to request additional mid-year testing to be performed.

Final Year-end Testing

• Final year-end testing data must be submitted to Alerus after the plan year ends. The final year-end testing data is required to include:
  • All employees who worked during the plan year (even if they had no applicable benefit amounts).
  • All applicable benefit amounts that occurred in the plan year.

SECTION 125 PLAN PACKAGE

Testing included:

• 25% key employee concentration test (entire cafeteria plan)
• 55% average benefits test (dependent care)
• More-than-5% owners concentration test (dependent care)
• Eligibility tests (cafeteria plan, health FSA, dependent care)¹
• Contributions and benefits tests (dependent care)²
• Benefits tests (health FSA)

SECTION 125 AND SECTION 105h PLAN PACKAGE

Testing included:

• 25% key employee concentration test (entire cafeteria plan)
• 55% average benefits test (dependent care)
• More-than-5% owners concentration test (dependent care)
• Eligibility tests (cafeteria plan, health FSA, dependent care)¹
• Contributions and benefits tests (dependent care)²
• Benefits tests (health FSA)
• Eligibility test (HRA)
• Benefits tests (HRA)

SECTION 105h (HRA)³

Testing included:

• Eligibility test (HRA)
• Benefits tests (HRA)

¹ Alerus performs the health FSA eligibility test (test 1 of 2) using eligibility vs. participation.
²Alerus does not perform a contributions and benefits test (test 2 of 3) for cafeteria plans.
³Please note for Section 105h plan package (HRA): If you offer a group medical plan and have any pre-tax deductions for the group medical plan, you must also perform a Section 125 Test (FSA and/or HSA and HRA benefits).

• Please refer to your Alerus Service Agreement for your applicable testing fees.
• Alerus does not perform initial mid-year testing, follow-up mid-year testing, or final year-end testing in the months of December or January. Any expedited testing needing to be completed during December or January will be subject to an additional expedited testing fee. If initial mid-year testing, follow-up mid-year testing, or final year-end testing is submitted within December or January, this testing will be performed in February.