MEP or Not?

[Guest davey o'brien391]

I have a client who has come to me with a question that has me confused. They are a group of 5 clinics that are owned by at least 10 different doctors per site. The clinics are run by a management group that owns 5% of each clinic. The clinics do common billing and purchasing, but do not share any revenues. The management firm charges a "fee" to each clinic for their services. While each clinic does its own hiring and firing of personnel all the paperwork and candidate screening goes through the management group.

In definition they aren't part of a controlled group nor affiliated services group, but there seems to be a common bond running through the five clinics and the management group. I have read some about common management groups, but don't know enough about whether this is one or not and whether these groups should be in one common plan or part of a MEP.

Any thoughts or direction would be greatly appreciated.

[GBurns]

The question is what would make them eligible for a single plan? I do not see anything, What do you see?

This management company does not seem to be managing anything, all they are doing is providing outsourcing (for a fee) some of the clerical and support services.

[Guest davey o'brien391]

It is more the way the group operates. While technically all hiring and firing goes through the individual clinic the management group has say in the hiring of the office manager from each site. In turn, while they don't directly hire the personnel at each site they do have influence with the managers at each site.

I guess it is more a feel than anything else that while on paper they are separate from each other they really don't operate in that fashion. Much like those who wear a wedding ring, but at single. It just doesn't feel right.

My only concern is that the IRS seems to be punitive if you err as part of a single plan or as a MEP.

[GBurns]

If you are married it does not matter to the IRS, courts or law, whether or not you wear a ring or act single, you are married period.

Because they act as they do still does not make it management. If you go into many stores or fast food joints you will see an inordinate number of "Managers" and "Assistant Managers" however, none of them have any managerial authority. It is a ploy used to make the simple feel important even if it costs them money. Acting does not make it so.

If you look at the DOL explanation of "exempt" employees you will see categories including Aministrative and Supervisory positions, however, since it is not the title that is important but the actual duties, the DOL provides definitions etc and point out that certain powers including the ability to hire etc is a requirement for qualifying.

From your post this management company does absolutely no management and therefore bears no relevance to the issue.