Just 'Cause They're Married?

[Bob_The_Insurance_Guy]

A CPA friend of mine called me with this situation. He does not know why, and neither do I.

Here's the situation: Husband and Wife. He is an Ophthalmologist with 7 employees, and she is a Franchisee for McDonald's with 58 employees. McDonald's Corporate told her that not only does she need to provide a health plan for her employees (understandable, and she was going to do that anyway), but also, her husband has to offer his employees a group health plan as well.



Neither of them has a financial interest in the other's business. Why would the Golden Arches make that claim, and how can they enforce it?

 

[DHK]

Community property state? Since they acquired the business together, and/or formed the legal entity to purchase the franchise during their marriage, they are both required?

Are they listed as corporate officers of the same business entity with multiple business ventures?

The only other thing I'm thinking of, is if the husband is covered by the group health plan, and by occupation, he is a business owner, so McD offers (requires) that since he is covered, they might as well extend the same group benefits to his employees too? If the husband isn't going to be covered by the plan, I don't see how it's any of their business?

I'm just throwing ideas out there.

Just get it in writing on official company letterhead.

 

[VolAgent]

Are they simply recommending this or are they requiring it with penalties for non-compliance?

I bet they are recommending it so they are off the hook if it is later questioned.

As to how they can enforce it? Simple, the franchise agreement. She has to do what corporate tells her. I have no idea what McDonald's says, but I'm sure they have ways to force compliance and penalties for failure to do so.

 

[scagnt83]

It is called "Controlled Group Regulations".

A "Controlled Group", is two different business entities (or more) whom are connected by stock ownership. Meaning they are owned by the same person or an immediate family member of that person.

The reasoning is that if you give one set of employees benefits, you must not discriminate and give the other set benefits.

This arose out of owners creating separate entities to avoid giving one class of employees benefits. But as all laws have done, it has morphed into something other than the original thing it meant to protect.

And yes, it is required. And yes, it is enforceable by the DOL. Plus they can be sued by employees of the discriminated group if they dont comply.