Question

1. Vandalay Industries offers a benefit plan to employees that are considered “qualified.” This means it:
   1. Can discriminate in favor of highly compensated employees and/or key employees
   2. Qualifies for acceptance by an insurance company’s underwriter
   3. Qualifies for acceptance by the State insurance department
   4. Qualifies for favorable income tax treatment
   5. Qualifies as a substitute for Social Security benefits

Answer 1

a. Can discriminate in favor of highly compensated employees and/or key employees

(As qualified workers are offered benefit plans so the industry can discriminate in favor of qualified employees.)