Can 2 501(c)(3) charities share employee benefits plans?

[Guest wwcpa]

2 tax-exempt charities, previously un-related, want to determine if its possible to share benefits between the two entities. Originally each group had 10 or less employees. Charity A is taking over some of the functions that Charity B previously handled. As part of this transition, 4 employees of Charity B will now become employees of Charity A. Charity B will only have a 4 or 5 employees remaining.

Is there some way for the 2 groups to combine for purposes of employee benefits?

Would a separate company or an "employee leasing" company be a solution in order to lease the employees to each charity?

Thanks!

[Carol V. Calhoun]

If the two employers have now become related, they could clearly share one plan. Even if they have not, sharing one plan would merely mean that it would be a multiple employer plan--still probably not a legal problem.