4100 / How do the aggregation rules apply to welfare benefit funds?

An employer must treat all of its welfare benefit funds as one fund for certain purposes.¹ For other purposes, an employer may elect to treat two or more of its funds as one.² An election to aggregate must be consistent for deduction and nondiscrimination purposes ( Q 4104, Q 4113).³ There are aggregation rules similar to those of IRC Section 414 for controlled groups of corporations, employers under common control, and affiliated service groups and there are rules similar to the employee leasing rules.⁴

1.   IRC § 419A(h)(1)(A).

2.   IRC § 419A(h)(1)(B).