In response to my last entry about 105(h) discrimination, several people have noted to me that the penalties for failing the discrimination testing under PPACA are not levied on the HCEs.  If the plan  Instead, there is an excise tax of $100 per day per employee discriminated against which is born by the employer.    While we need more guidance and/or regulations, this is correct as it relates to insured plans now subject to discrimination testing.

The problem is that PPACA testing rules for insured plans and existing 105(h) testing rules may not be mutually exclusive.  So don't assume that the current 105(h) penalties not longer apply, or that the PPACA penalties for 105(h) failure are the correct ones either.  Start by acknowledging you have to be aware of discrimination testing and go from there.