For Cafeteria Plans:

A “highly compensated employee (HCE)” is:

• An officer; or
• A shareholder who owns more than 5%; or
• An individual with annual compensation in excess of the following: ($155,000 for year 2024, $150,000 for year 2023, $135,000 for year 2022)
• Spouses or dependents of individuals in the first three categories above

A “key employee” is someone who, during the preceding year:

• Was an officer with an annual compensation in excess of the dollar limit for that year ($220,000 for year 2024, $215,00 for year 2023, $200,000 for year 2022)
• Owned more than 5% of the business
• Owned more than 1% of the business and had an annual compensation greater than $150,000

For FSAs and HRAs:

An HCE is:

• One of the 5 highest paid officers; or
• A shareholder owning more than 10%; or
• Someone who is among the highest paid 25% of ALL employees; or
• Spouses or dependents of individuals in the first three categories abo

For DCAs:

An HCE is:

• A shareholder owning more than 5% during the past or current year; or
• An individual with compensation during the past or current year exceeding: $155,000 for year 2024; $150,000 for year 2023; $135,000 for year 2022: if they were not an employee during the preceding year, we would use their anticipated salary for the current year; OR
• Spouses or dependents of individuals in the first three categories

This information may be found in IRS Publication 15-B.