124 STAT. 876 PUBLIC LAW 111–148—MAR. 23, 2010 covered under the cafeteria plan were the subject of good faith bargaining between employee representa- tives and the employer, or ‘‘(iv) who are described in section 410(b)(3)(C) (relating to nonresident aliens working outside the United States). A plan may provide a shorter period of service or younger age for purposes of clause (i) or (ii). ‘‘(5) ELIGIBLE EMPLOYER.—For purposes of this subsection— ‘‘(A) IN GENERAL.—The term ‘eligible employer’ means, with respect to any year, any employer if such employer employed an average of 100 or fewer employees on business days during either of the 2 preceding years. For purposes of this subparagraph, a year may only be taken into account if the employer was in existence throughout the year. ‘‘(B) EMPLOYERS NOT IN EXISTENCE DURING PRECEDING YEAR.—If an employer was not in existence throughout the preceding year, the determination under subparagraph (A) shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current year. ‘‘(C) GROWING EMPLOYERS RETAIN TREATMENT AS SMALL EMPLOYER.— ‘‘(i) IN GENERAL.—If — ‘‘(I) an employer was an eligible employer for any year (a ‘qualified year’), and ‘‘(II) such employer establishes a simple cafe- teria plan for its employees for such year, then, notwithstanding the fact the employer fails to meet the requirements of subparagraph (A) for any subsequent year, such employer shall be treated as an eligible employer for such subsequent year with respect to employees (whether or not employees during a qualified year) of any trade or business which was covered by the plan during any qualified year. ‘‘(ii) EXCEPTION.—This subparagraph shall cease to apply if the employer employs an average of 200 or more employees on business days during any year preceding any such subsequent year. ‘‘(D) SPECIAL RULES.— ‘‘(i) PREDECESSORS.—Any reference in this para- graph to an employer shall include a reference to any predecessor of such employer. ‘‘(ii) AGGREGATION RULES.—A ll persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (n) or (o) of section 414, shall be treated as one person. ‘‘(6) APPLICABLE NONDISCRIMINATION REQUIREMENT.—For purposes of this subsection, the term ‘applicable nondiscrimina- tion requirement’ means any requirement under subsection (b) of this section, section 79(d), section 105(h), or paragraph (2), (3), (4), or (8) of section 129(d). ‘‘(7) COMPENSATION.—The term ‘compensation’ has the meaning given such term by section 414(s).’’. (b) EFFECTIVE DATE.—The amendments made by this section shall apply to years beginning after December 31, 2010. 26 USC 125 note.
