Separate POP & FSA Plan

[Guest Joe Vasko]

I have a client who currently sponsors a POP Plan for employees eligible to participate in the company's group health Plan. The company is a staffing agency that employs around 500 W-2 employees. Under the POP, some how only 12 employees are eligible to participate in the company's group health plan. Instead of amending this Plan to add the Dep. Care Reimbursement, could the employer establish a separate Plan only for Dep Care expenses which would cover all 500 employees ?

Thanks, Joe

[GBurns]

What is a "staffing agency"? Is it a placement firm, a temp agency or a PEO?

In any case have you yet determined .. Who is the employer of these W-2 employees? There is no such thing as a co-employer as far as the IRC goes.

Will the plan have to be a multiple employer plan in order to even be there and does your state allow multiple employer plans?

[Guest Joe Vasko]

GBurns,

This is a single employer plan. By staffing agency, I mean that the majority of the employees provide services at their clients place of business over a prolonged period of time. Normally, you would expect these employees to be contract labor, but they are not.

The employers current health plan excludes these "staffing" employees. The company wants to add the Dep Care benefit for all employees, but under a separate fringe benefit plan due to the eligibility requirements of the POP.

My question is can the employer establish a seperate Dep Care Plan (#502), in addition to the POP (#501)?

Thanks, Joe