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Welfare Plans and Related Employers


Guest dhp2
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Company has a health plan covering its employees. Company is 50% owner of LLC with 2 employees (one of whom owns the other 50%).

May the 2 LLC employees participate in Company's health plan? May one participate, but not the owner/employee?

I don't see explicit application of the controlled group rules to ERISA welfare plans, and so am unsure how to proceed. Many thanks for any input.

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Why would this not be a controlled group or ASG under both the IRS and ERISA?

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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Yes you need 80% depending on the type of controlled group, but the 80% depends on how it is calculated taking into account 318 attribution rules etc.

See:http://employerbook.hypermart.net/CGRegs.html#r414

Look at the calculations for the various scenarios.

Even then "common control" should be a problem and the you still have ASG, anyhow.

I suggest that you look at "Who's the Employer" Q&A where you will find questions such as #245. Then do a search on these Boards (all Forums" for the many prior discussions on these issues. A Google search would also be good to locate the many good explanations and worksheets that have been published.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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