Controlled Groups/Common Ownership

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What if a business is owned by multiple people or entities?

Employers that are commonly owned may be considered a single group for purposes of determining their ACA group size and ALE status, Federal COBRA status, and Medicare Primary/Secondary status. The IRS refers to these groups as “controlled groups” or “aggregate groups.” Even if employers in a controlled group or aggregate group have separate tax IDs, different groups of employees, different locations, or different industries, they can still be combined for determining compliance responsibility.

A determination of common ownership and “controlled group” status must be made by a CPA, tax professional, or legal counsel in accordance with Internal Revenue Code § 414 (b) (c) (m) or (o).

Note: Groups with common ownership are not usually required to have the same health plan, but doing so often simplifies ACA reporting.