Fringe Benefit Plans and Common Paymasters

[Guest RAJ]

One of our client's utilizes a "common paymaster" and wants to offer a cafeteria plan. In researching, a common paymaster is "two or more related companies employing the same individual at the same time and paying this individual through a common paymaster, which is one of the companies, the corporations are considered to be a single employer." (IRS website, Special Rules for Paying Taxes) From a fringe benefit standpoint, is it possible to offer a cafeteria plan under this arrangement? Would the companies have to be part of a controlled ownership group or affliated service group? I don't believe this would be a MEWA since the companies are related, however the concept from a benefit standpoint seems a bit confusing. Has anyone encountered this before and if so, could you point me in the right direction?

Thanks! :confused: