Cafeteria plans and group health plans are not permitted to discriminate in favor of high income employees. Various tests under Section 105 and 125 are used to ensure that plans do not provide favoritism to high income employees in terms of contributions, coverage and eligibility. Some of these tests are easy to perform because they are based on numbers, while others can be more involved because they are based on circumstances and facts relevant to the case. Plan Administrators are encouraged to look at the overall plan design to evaluate and confirm that there is no discrimination. For Example, if a plan allows high income employees to enroll immediately, yet lower income employees need to fulfill a 60 day waiting period, the plan would be deemed discriminatory. Administrators should perform yearly nondiscriminatory tests, as they are subject to review upon audit by both the Department of Labor and/or the IRS.