Compliance Q&A: Controlled Group, Common Control or Affiliated Service Group & Employee Benefits

Controlled group, common control, and affiliated service group rules are some of the most complex aspects of employee benefit plan compliance. Related employer status can affect many areas of compliance, such as:  

• IRC Section 125 Cafeteria plan nondiscrimination testing;
• IRC Section 105(h) nondiscrimination testing for self-insured group medical plans, including health FSAs and HRAs;
• IRC Section 129 nondiscrimination testing for dependent care assistance plans;
• Determining whether an employer is an "applicable large employer" and subject to the ACA’s "pay or play rules";
• Comparability rules for HSAs;
• COBRA, in determining employer size for COBRA applicability, as well as issues on COBRA responsibility in mergers and acquisitions; and
• Whether a plan is a multiple employer welfare arrangement (MEWA).