We have a client with almost 5000 employees (including union, part-time, temporary, full-time, etc.). Of this number, around 1000 are actually full-time according to their definition. They currently only offer benefits to full-time employees.

They want to add a cafeteria plan with FSAs and only want full-time people to be eligible. However, for the other 4000 employees, they want to extend some voluntary benefits to them on an after-tax basis.

For non-discrimination testing purposes, would they need to include part-time and temporary employees in the testing pool? Also, would offering voluntary, after-tax benefits to the part-time and temporary pose any problems from a compliance standpoint? (The same voluntary benefits will also be offered to the full-time employees but on a pre-tax basis through the cafeteria plan.)

Thanks!

They would not have to add part-time employees to the testing pool simply because they are not eligible for benefits. And since part-time employees and seasonal employees do not fall under the same classification as full-time employees offering them different benefits with different funding mechanisms are not a porblem.