Tax Facts

3763 / What are the basic qualification requirements for forming a multiple employer plan (MEP) under the final DOL regulations?

The DOL released final rules governing MEPs on July 31, 2019, which became effective as of September 30, 2019. In general, to quality as a multiple employer plan (MEP) under the final regulations, a plan must satisfy five basic requirements:1

(1) Under the DOL guidance, the association must have at least one substantial business purpose that is not related to offering the plan.

(2) The employer-members of the association must control the MEP’s activities and any employers that participate in the MEP must control the MEP both in substance and in form, whether directly or indirectly.

(3) The association must adopt a formal organizational structure, which includes bylaws, a governing body and other organizational aspects where relevant.

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