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Health & Welfare Blog

Employee Aggregation Rules: Affiliated Service Groups

[fa icon="calendar"] Jun 29, 2015 9:00:00 AM / by Ken Ruthenberg

Ken Ruthenberg

Third In A Series

In the first two installments of this series on the aggregation of employers and employees, we spent a dark and stormy night with the owners of SMALLCO and SMALL Vineyards and their advisors learning about the controlled group rules and why the employees of the two businesses had to be considered employed by one employer for employee benefit plan purposes. This prompted one of the owners of the winery (whose identity is disclosed only as "D") to wonder if his dental practice has any such problems. We now welcome Dr. D to the wonderful world of affiliated service groups (ASGs).

Why might Dr. D have a problem? Dr. D has his own dental practice set up as a professional corporation, which he owns 100%. Being an enterprising fellow, not only does he own his practice and a 20% interest in the SMALL Vineyards winery, he also owns a 50% interest in a dental lab that provides a variety of services to his patients, the patients of the other dentist owners of the lab, and other dentists' patients as well. Dr. D is concerned that his corporation's retirement plan, that benefits himself and his small staff, may have to cover the employees of the dental lab. 

Well, Dr. D, the good news is that your dental practice and the dental lab do not have to be aggregated under the controlled group rules. The bad news is that they may have to be aggregated under the ASG rules.

Interested in learning more about ASG rules? Please fill out the form on this page to access the full article.

Ken Ruthenberg

Written by Ken Ruthenberg