5500 filing

[Guest Happy]

I have an account with 2 separate S corps where 2 of the 3 Owners have a controlling interest in both S corps. Can they file one 5500 form for the Section 125 plan that covers both S Corps?

[J Simmons]

I'm glad you're Happy. I hope you are after reading this and other expected posts in this thread.

What percentages are owned by each of the 3 owners in each of the 2 S corps? For example, A owns 10% of S corp1 and 22% of S corp2, B owns ... . Without knowing that, it cannot be determined if the 2 S Corps are/are not a control group.

If the two S corps are not a control group, you have an multiple employer welfare arrangement (MEWA) because they share one 125 plan. ERISA preempts certain state insurance laws from applying to a single employer welfare arrangement. The shared 125 plan would be a MEWA if the 2 S corps are not part of a control group (unlike the IRC, ERISA does not recognize an affiliated service group as a single employer).

The significance of being a MEWA? You might have to register the 125 plan as a 'health insurance company' in each state where you have any EEs working. Whoever is administering it might have to register as a TPA, since it would be providing plan admin services regarding EEs of another ER. Those are the two implications in my state. The states where the EEs of the 2 S corps are might have other/more requirements where ERISA preemption does not apply because it is a MEWA.

Barring some factor I don't see in the OP or assume, I would think one Form 5500 will do. However, you should know that if the 2 S corps are a control group and have fewer than 100 plan-eligible employees, there might be a small plan exemption from filing. That exemption would also likely apply if the 2 S corps each had their own 125 plan and less than 100-eligible employees each. For the exemption, you'd also need to not have voluntarily created a trust fund, even unwittingly--among other requirements.