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6 Replies Last post: Aug 28, 2008 11:00 AM by JenniferS

Is health insurance required in all businesses owned by the same person if provided in one?

Dec 29, 2007 12:17 AM

workingMom 1 posts since
Dec 29, 2007

My husband and I own several small businesses. They are all separate entities. The main company is a C corporation. The other businesses are LLCs. I recently heard that if we provide health insurance to employees in our corporate office, we are required to provide the same coverage to employees in our other entities (retail employees). Is this correct? If so, what laws govern this?

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CorpCons08 1,128 posts since
Nov 14, 2007

1. Re: Is health insurance required in all businesses owned by the same person if provided in one? Dec 29, 2007 12:27 AM

No, if they are separate entities and the employees are paid under the separate entity, then you do not have to offer them the same benefits as the employees working for the corporate company. CC08

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LUCKIEST 7,935 posts since
Aug 6, 2007

2. Re: Is health insurance required in all businesses owned by the same person if provided in one? Dec 29, 2007 9:29 AM

Working Mom, I agree with CC08. Each company stands alone. That is why they are all separate entities.
Maybe what you heard is that if you provide health
insurance to ANY employee, you are required to
provide the
same coverage to ALL employees.
LUCKIEST

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CorpCons08 1,128 posts since
Nov 14, 2007

3. Re: Is health insurance required in all businesses owned by the same person if provided in one? Dec 29, 2007 11:31 AM

in response to: LUCKIEST

I also started thinking about this last night.
Are you setting these "other" entities up as subsidiaries of your main corporation?
If this is the case, then YES, you may be liable to provide the same benefits to all.

CC08

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LUCKIEST 7,935 posts since
Aug 6, 2007

4. Re: Is health insurance required in all businesses owned by the same person if provided in one? Dec 29, 2007 11:52 AM

You have a Lawyer and Insurance Agent. Right, Ask Them.
LUCKIEST

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CA-Ins-Finder 4 posts since
Jan 11, 2008

5. Re: Is health insurance required in all businesses owned by the same person if provided in one? Jan 13, 2008 11:38 AM

In the insurance world this is called a "carve out group". When you carve out you are not required to cover the other intities. We do this often with front office (owners) who need insurance and do not wish to enroll the workers on the same plan. If you have any further questions please feel free to give our office a call and ask for me. Don

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JenniferS 1 posts since
Aug 28, 2008

6. Re: Is health insurance required in all businesses owned by the same person if provided in one? Aug 28, 2008 11:00 AM

in response to: CA-Ins-Finder

Actually, if you and your husband are the sole owners of all of the businesses, you have to provide health insurance to everyone if you provide it at all. This is because you are considered a Controlled Group of entities (controlled by 5 or fewer people). However, there are some ways that you can avoid having it be a huge problem. Your company policy (that you need to have in writing and approved by both of you in formal meeting minutes) can be that insurance is only provided to full-time employees (who work more than 24 hours per week) after 3 years of employment. 3 years is the max waiting period, but that will probably keep you from providing insurance to everyone except loyal employees anyway.

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Is health insurance required in all businesses owned by the same person if provided in one?

Dec 29, 2007 12:17 AM

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