ASG vs. MEP

[cerickson]

I have a plan for a collection of medical practices (we'll call it ABC Medicine).  There are 7 doctors, they all have equal ownership in the partnership (LLC).

The plan document says they are NOT an ASG, and that they are an MEP.  There are participation agreements completed for each doctor's practice.  The doctors' practices do not have any employees.  The employees are all employed under ABC Medicine.

Since the beginning, we have tested this plan as if it is an ASG and only recently did the plan document issue come up.

Can you help me understand the difference between an ASG and an MEP?  I believe this is an ASG, but I need to be able to explain this to the client.  And what kind of VCP corrections will be required if it is an ASG?

Thanks in advance!

[Luke Bailey]

I think the place to start is whether they are practicing as Schedule C sole proprietors, somehow in connection with the LLC, or whether they practice as employees or members of the LLC. You don't provide enough facts, but the LLC may be the only possible "employer"/plan sponsor.

[JackS]

At the risk of making a simplistic statment about a complicated topic, this seems like a classic ASG to me.  It does not matter what the doc says they are or are not.  You cannot "not" be an ASG just because you say your not.  I would keep testing them as such until a CPA or Attorney reviews the facts and circumstances and makes a detemination.

[david rigby]

Consider the possibility that this statement was in the document precisely because someone did an analysis.  Look for that first.