Combining two groups into one and complying with ACA

Q: There is a group that was written several years ago and actually combines two groups into one – one is an accounting firm, and the other is an industrial machinery and equipment company. They were originally written as one group under the SIC code for the industrial machinery and equipment due to common ownership and this being the larger of the two companies. However, I am not sure this is still proper with the regulations of ACA.Is this allowed now?

A: It depends on whether the two companies are part of the same tax controlled group (i.e., their degree of common ownership), which is a legal analysis that should be performed by an ERISA attorney. In general, if one company owns at least 80% of the other company it should be fine to cover their employees under one group health plan.If there is less than 80% common ownership they should talk directly to counsel so that all facts can be reviewed.


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