Leasing Companies & Benefits

[blueturnaround]

What is the name of your state (only U.S. law)? PA

Company XYZ has 100 employees. 3 are leased to a non-profit XYZ community programs (XYZCP). XYZCP has its own board and is a 501c3. Company XYZ is a for profit with over 100 owners.

Currently, the 3 leased employees are under all the benefits plans of company XYZ, NOT XYZCP.

How should we proceed? I've done a bit of research, which I'm 95% confident of. But I wanted some other opinions to check myself.

 

[Mass_Shyster]

How should we proceed?

That depends on your goals.

 

[pattytx]

Agree. What are you trying to accomplish?

 

[blueturnaround]

Compliance, they are not compliant right now. I think there are 2 ways to become compliance, establish a MET or break off the plan for the non profit.

I thought that was implied that they were not compliant. Sorry.

P.S. also, I was thinking plan documents could be ammended...but I'm not sure how to navigate the common law / leased employee ambiguities....I thought maybe someone had experience with this.

 

[pattytx]

Help us out here. What law do you believe is being violated?

 

[blueturnaround]

IRC §414(3)(C)

I should have mentioned non of the benefit plans are self funded.

P.S. more specifically:

Group term life insurance under IRC §79.

Accident and health plans under IRC §106.

Cafeteria plans under IRC §125.

Dependent care assistance programs under IRC §129.

COBRA continuation requirements under IRC §4980B.

Or simply put, PEO's can't provide employee benefits to leased employees...