Salary nondiscrimination in benefits

NOTE: Implementation of this provision has been delayed until additional regulations are issued. The description of this provision is based on the law itself. Provisions will be clarified under regulations when issued.

Sometimes employers have different levels of benefits for different levels of employees in an organization. Under this provision, employers can't offer better benefits to "highly compensated" employees. The intent is to ensure that entry-level employees receive the same level of benefits as highly compensated employees.

Definition of "highly compensated employees" follows Section 105 of the Internal Revenue Code.

Example: If your plan has no waiting period for the CEO, you may not have a 90-day waiting period for your other employees.

Plans can require lower dollar or premium percent contributions from employees who receive lower compensation.

Exceptions
This requirement excludes the following employees:
  • Part-time or seasonal
  • Union
  • Non-resident aliens who receive no earned income
  • Those who have not completed three years of service
Effective
The effective date of this requirement will be determined by regulations, which have not yet been issued.

Find out how Priority Health is addressing this requirement.
This webpage provides a general overview of certain aspects of health care reform based on information currently available. It does not cover all of the requirements, and new information is released frequently. Information provided by Priority Health about health care reform should not be considered legal advice. [This is an educational tool only and the effect of reform may differ depending on your circumstances.]