Treas. Reg. Section 1.105-11©(2) contains the eligibility nondiscrimination test for self-insured reimbursement plans. Section ©(2)(iii)(D) contains an exclusion from testing for employees included as part of a bargaining unit. I don't see the same exclusion in Section ©(3), which contains the Benefits test. Can an employer exclude collectively bargained employees when it runs the Benefits test for its MERP?

Bueller? Bueller?

Good impersonation of Ben Stein!

I believe the exclusion set forth in Treas. Reg. Section 1.105-11©(2)(iii)(D) applies to the nondiscriminatory benefit requirement of ©(3) just as it does to the eligibility to participate requirement of ©(2), where specified.

The reason: ©(3) references participants, and that the same benefits for participants who are highly compensated individuals must be provided to other participants. Not to other employees generally. Participants are only employees that are eligible. Since ©(2) allows you to exclude from the eligibility rule those employees that are under a union contract, they would not be part of your participant pool for applying the ©(3) rule.