Section 89 Simplification Act

Section 89 Simplification Act - Amends Internal Revenue Code provisions relating to the new nondiscrimination requirements for coverage and benefits under certain statutory employee benefit plans to: (1) prescribe criteria for simplified health arrangements which, if offered by an employer, will be treated as meeting the nondiscrimination requirements of Internal Revenue Section 89; (2) increase from 17 1/2 hours to 25 hours per week (30 hours in 1989, 27 1/2 hours in 1990) the threshold number of work hours triggering requirements with respect to part-time employees; (3) apply noncompliance penalties (taxation of benefits) only with respect to highly compensated employees rather than with respect to all employees; (4) exempt the plans of entities with no highly compensated employees; and (5) revise rules relating to plan testing, aggregation of plans, and coverage valuation.