© Copyright 2014 Saul Ewing LLP Employee Benefit Plans: What’s Mine is Mine and What’s Yours is My Responsibility Sarah (“Sally”) L. Church, Esq. Paul A. Kasicky, Esq. Kevin A. Wiggins, Esq. 1

© Copyright 2014 Saul Ewing LLP DISCLAIMER The content of these presentation materials has been prepared by Saul Ewing LLP for informational purposes only. The provision and receipt of the information in these presentation materials should not be considered legal advice, does not create a lawyer-client relationship, and should not be acted on without seeking professional counsel who have been informed of the specific facts. Should you wish to contact a presenter to obtain more information regarding your company's particular circumstances, it may be necessary to enter into an attorney/client relationship. 2

© Copyright 2014 Saul Ewing LLP Discrimination Rules Retirement Plans  401(k)  403(b)  Defined Benefit Plans Health Plans  Self-Insured  Fully Insured (pending guidance) 3

© Copyright 2014 Saul Ewing LLP Discrimination  Discrimination rules are designed to help ensure participation by NHCEs  All employees of a controlled group are treated as employed by a single employer for purposes of the discrimination rules  Some Affordable Care Act requirements also apply on a controlled group basis ● Definition of “Large Employer” 4

© Copyright 2014 Saul Ewing LLP Controlled Group  Parent/Subsidiary Chain ● Chain of corporations or other trades or businesses at least 80% owned by common parent  Trade or Businesses Under Common Control ● Five or fewer individuals, trusts, or estates own at least 80% of vote or value ● Such five or fewer persons own more than 50% of vote or value ▪ Only taking into account “identical ownership” 5

© Copyright 2014 Saul Ewing LLP Exempt Organizations If exempt organization’s employees participate in a plan, then that exempt organization is in a controlled group with any organization under “common control” Different rules for churches 6

© Copyright 2014 Saul Ewing LLP Common Control Common control exists between an exempt organization and another organization if at least 80% of directors or trustees of one organization are either “representatives” of, or directly or indirectly controlled by, the other organization 7

© Copyright 2014 Saul Ewing LLP Representatives A trustee or director of an exempt organization is treated as a representative of another exempt organization if:  Trustee  Director  Agent  Employee 8

© Copyright 2014 Saul Ewing LLP Direct or Indirect Control A director or trustee of an organization is controlled by the other organization if the other organization has the general power to remove such trustee or director and designate a new trustee or director 9

© Copyright 2014 Saul Ewing LLP Permissive Aggregation Two exempt organizations that maintain a plan that covers employees from each organization may treat themselves as under common control if each of the organization regularly coordinates their day-to-day exempt activities  E.g., an exempt hospital and an exempt organization with which it coordinates delivery of medical services 10

© Copyright 2014 Saul Ewing LLP Joint Ventures Controlled Group Rules Benefits for Joint Venture Employees Tax-Qualified Plans – Multiple Employer Group Health Care –MEWA 11

© Copyright 2014 Saul Ewing LLP Questions 12

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