(1) A group may be formed by:

(a) employees in an office, department, board, commission, attached-to agency, county, incorporated city or town, school district, unit of the university system, the judicial and legislative branches of state government;

(b) employees in an organizational subdivision of an employer, such as a division, bureau, work unit, institution, etc.;

(c) employees in a bargaining unit; or

(d) other groups of employees defined by an employer that are not designed to provide individual decision-making regarding participation.

(2) A group may consist of employees who are:

(a) all currently eligible to retire;

(b) all currently ineligible to retire; or

(c) a mix of those eligible and ineligible to retire.

(3) No group may be formed with fewer than five employees.

(4) No group may discriminate in favor of highly compensated employees and be formed only for the benefit of a select group of the highest paid employees, which means compensation in excess of $80,000 and in the top 20% of employees ranked on the basis of compensation paid during the year.

(5) Employees who may be excluded from participation without violating the nondiscrimination provisions described in (4) include:

(a) employees who are not:

(i) eligible for sick leave;

(ii) eligible for benefits with the employer;

(iii) receiving an employer contribution for group benefits under 2-18-703, MCA, or other employer contribution to benefits; and

(iv) active in the employer's retirement system (retirement-eligible-only groups);

(b) seasonal and less-than-half-time employees;

(c) employees covered by a collective bargaining agreement; and

(d) certain nonresident aliens.

(6) When a group has been formed:

(a) members and VEBA participants may not opt out of the group;

(b) current employees or retirees of the same employer not already in the group may not opt into the group; and

(c) if an employee's circumstances change such that the employee becomes eligible to be a member of an existing group, the employee automatically becomes a member of this group.