Boca Raton's real estate market is defined by its $1M–$3M luxury segment, which continues to drive up to 5% more single-family home sales year-over-year even as the overall market cools. With an average sales price of approximately $1.03 million in June 2025 — and brokerages commanding premium commissions — Boca Raton real estate principals routinely rank among the highest-compensated small business owners in Palm Beach County. That high compensation creates a structural nondiscrimination problem: the gap between HCE owners and their non-HCE support staff is vast, and when a health plan is designed without regard for that gap, it almost always fails IRC Section 105(h) testing.
Boca Raton brokerages are also more likely than average to implement sophisticated benefit arrangements — executive health plans, concierge medicine memberships, premium HRAs — precisely because the principals can afford them. These premium arrangements trigger heightened 105(h) scrutiny: if the owner participates in a generous self-insured health benefit that isn't equally available to covered non-HCE employees, the entire arrangement is at risk.
Key facts
$14
Florida minimum wage .00/hr in 2026, rising to $15.00/hr January 1, 2027
Boca Raton average sales price was approximately $1.03M in June 2025, down 12% YoY
The $1M–$3M segment posted 5% more single-family sales YoY — highest volume tier
IRC 105(h) tests self-insured plans for eligibility (70% non-HCE coverage) and benefits uniformity
HCEs at Boca Raton brokerages often include the principal and one or two top managers
ACA Section 1557 prohibits sex, race, age, and disability discrimination in all covered plans
A Boca Raton brokerage that generates $3M to $5M in annual gross commission income may have two or three principals earning well into six figures — each qualifying as an HCE. Their support team might include a listing coordinator, a transaction manager, a social media specialist, and a receptionist — four non-HCEs earning $40,000 to $65,000 per year. The plan the principals want for themselves (concierge care, low deductibles, comprehensive dental and vision) costs far more per employee than what fits in the budget for support staff.
The 105(h) benefits test says: every specific benefit available to an HCE must be available to all covered non-HCEs. If the owner has a $500 annual deductible and the coordinator has a $3,500 deductible, that is a specific benefit available to the owner but not the coordinator — the test fails. The solution is not to take benefits away from the principals; it is to ensure the plan design provides equal benefit access to all covered employees, even if the premium contribution split differs by employment tier.
Sorting out your benefits obligations
Step 1: Inventory your workers. Separate all W-2 employees from 1099 IC agents. For most Boca Raton brokerages, licensed sales agents are ICs under Florida Statute §475.011; only the office staff are W-2 employees eligible for 105(h) testing.
Step 2: Classify HCEs. Identify the five highest-paid officers, any 10%+ owners, and the top 25% of all employees by compensation. In a ten-person W-2 staff, the top three employees (30%) qualify as HCEs if the plan fails the 25% threshold at that count.
Step 3: Draft a uniform benefit schedule. Ensure deductibles, copays, out-of-pocket maximums, and covered services are identical for all covered employees regardless of position. Premium contribution rates (what the employee pays) can differ by classification, but the underlying plan benefits must be uniform.
Step 4: Run annual tests. Using your W-2 payroll data and plan enrollment records, verify that (a) at least 70% of non-HCEs are enrolled and (b) no benefit line item is available to HCEs that is not equally available to non-HCE participants. Document the results and retain the records.
Florida's no state income tax environment means the 105(h) income inclusion penalty is purely a federal tax event. However, Boca Raton brokerages operating as S corporations or partnerships should note that the income inclusion flows through to the individual owners' federal returns, not the entity level. Work with a CPA familiar with Florida pass-through entity taxation to understand the full liability picture.
| Plan Type | Subject to 105(h)? | Subject to ACA 1557? |
|---|---|---|
| Fully insured small group plan | No | Yes |
| Self-insured group health plan | Yes | Yes |
| Health Reimbursement Arrangement (HRA) | Yes (unless ICHRA/QSEHRA) | Partially |
| Individual Coverage HRA (ICHRA) | No | ACA rules apply |
| Qualified Small Employer HRA (QSEHRA) | No | ACA rules apply |
Talk to a licensed advisor about health plan nondiscrimination compliance for your Boca Raton real estate brokerage.