Dictionary of Insurance Terms: nondiscrimination rules
nondiscrimination rules
rules stating that, under the Tax Equity and Financial Responsibility Acts of 1982 and 1983 (TEFRA) a plan cannot discriminate in favor of key employees regarding contributions and benefits if favorable tax treatment is to be retained. For example, the premiums the employer pays on behalf of the employee for the first $50,000 of group term life insurance are not considered taxable income to the employee if the plan does not discriminate.
