What must be defined to determine if a FSA is compliant with nondiscrimination tests?

To determine if a Flexible Spending Account (FSA) is compliant with nondiscrimination tests, it is essential to define the classification of employees. Nondiscrimination tests are designed to ensure that benefits are provided equitably and do not favor highly compensated employees over lower-paid employees. Classifying employees appropriately allows for a fair assessment of these tests.

By establishing clear classifications, employers can demonstrate that the FSA is accessible to all eligible employees, not just a select group. This classification can involve differentiating between full-time and part-time employees, salaried versus hourly employees, and other relevant categories that could impact eligibility and participation.

The other choices, while relevant to various aspects of FSA administration, do not directly address the necessary compliance with nondiscrimination tests. Utilization of claims pertains more to how benefits are used rather than who is eligible, employee contribution levels relate to how much employees put into the plan rather than regulatory compliance, and plan document specifics are important for the overall structure of the plan but do not specifically align with the nondiscrimination focus that hinges on employee classification.