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Preface: I am a benefits administrator at a PEO. PEOs are the employer of record for all federal taxes and for SUTA taxes in the majority of states. There are only a handful of "client reporting" states, wherein the PEO acts as the reporting agency but files and pays SUTA under the client's name/EIN - Missouri and New York come to mind. SUTA claims in PEO reporting state fall back on the PEO at least while the client is still with the PEO and in some states even after the client leaves the PEO. PEOs are also permitted to, and most do, sponsor health and welfare plans for their worksite employees. There is nothing, legally speaking, that prevents a client company from sponsoring their own benefit plans but most PEOs require the client companies to adopt the PEO's plans in their service agreement. Of those that will allow a client company to adopt their own plans, most will not touch them for anything other than payroll deductions, which are given back to the client on the payroll invoice. To answer your original question, it depends on who the plan sponsor is. If an employee works for a worksite employer (client) and is covered by a health plan that is sponsored by the PEO and that employee later moves to another worksite employer that also offers the PEO's health plan, the waiting period should not start over (unless there was a significant lapse of time between DOT at the first worksite employer and DOH at the second). If the health plan was sponsored by the worksite employer, the waiting period would start over unless both worksite employers offer the same plan - IE: Company A and Company B are commonly owned but are separate legal entities so they have separate contracts with the PEO but share the same (client sponsored) health plan and all employees of A and B are covered by that same client sponsored plan. It is theoretically possible that the PDs of the PEO sponsored health plans could require the employee to satisfy the WP again if they change worksite employers AND those worksite employers aren't related to each other in any way (common control or ownership) but I would be something more than shocked if this were actually written into the PD....that would be an ERISA/125 nightmare and I don't know anyone who would want to deal with that kind of a loophole.

Assuming that I am reading this right, wouldn't it be the case that the owner would be personally liable not only for the excise taxes but to restore every cent of the loan that is not repaid if and when the sponsor goes under? Using pension plan assets to meet payroll sounds like one of the very worst things that you could do. If it has come to that, it is probably time to close up shop. Much better than draining everyone's retirement account first!

Now the sponsor knows that it made an honest mistake, it should realize the depth of ignorance and start arranging for training for plan fiduciaries concerning fiduciary responsibilities. Otherwise, I think the incident strongly suggests disregard for fiduciary standards.

Might also tell the owner that right now the excise taxes are probably very little but if he let's this fester for a long period of time they could become significant AND he could be personally liable for the excise taxes as well as the DOL penalty.

How long ago did the person who advised the CPA have his/her lobotomy?