Many companies are unaware of the filing requirements (Form 5500) for their welfare plans or don’t know how to put together their filing properly. Have you missed issues such as...

Are the types of benefits you provide to your employees subject to annual reporting and disclosure requirement under ERISA (Form 5500)?
Did you know that “any plan, fund, or program which is established or maintained by an employer or employee organization for the purpose of providing certain benefits” to its employees, former employees or beneficiaries, subject to certain exceptions, are subject to ERISA (Form 5500 filing)? Call 5500 Tax Group to help you determine if your plan, fund or program meets an exception or is subject to annual reporting and disclosure requirements under ERISA.

What threshold must your plan reach that causes a Form 5500 filing requirement?
Generally once a welfare plan has 100 or more participants as of the beginning of the plan year there is a Form 5500 filing requirement, unless it meets an exception. All welfare plans funded through a trust must file a Form 5500 regardless of the number of participants. Call 5500 Tax Group to help you determine if you meet an exception or need to file Form 5500.

What benefits are not required to file Form 5500?
There are some specific exceptions to the annual reporting and disclosure requirements including certain apprenticeship or training plans, government plans, church plans, federal or state workers’ compensation coverage, and plans maintained for unemployment compensation or disability insurance laws. If you are concerned that you have a benefit that might require a Form 5500 filing, please call 5500 Tax Group to discuss.

What attachments are required for your welfare Form 5500 filing based on plan funding?
Fully Insured Plans: Must attach a Form 5500 Schedule A for each insurance contract.

Self-Funded Plans (General Assets of the Plan Sponsor): File Form 5500 with no attachments if the benefits are paid strictly out of general assets of the plan sponsor. Please call 5500 Tax Group to help you determine how to file your self-funded plan Form 5500 properly.

Combination Insured and Self Funded: Must attach a Form 5500 Schedule A for each insurance contract for the insured portion of the plan. Please call 5500 Tax Group to help you determine how to file your Form 5500 properly.

Other Funding Arrangements: Please call 5500 Tax Group to help determine the necessary attachments to your Form 5500.

What actions by plan sponsors will cause unintended sponsorship of a plan, leading to a Form 5500 requirement?
Plan sponsors are limited to functions listed in the ERISA “Safe Harbor” regulations for voluntary plans offered to their employees. There are three basic functions allowed under the “Safe Harbor.” Employers may permit an insurer to publicize the program to employees, collect premiums through payroll deductions, and remit premiums collected to the insurer.

Plan sponsors can get into trouble endorsing a voluntary plan by recommending the plan or being overenthusiastic about it. Be sure to only collect premiums through actual payroll deductions. While certain ancillary functions by the plan sponsor are allowed, limit them as much as possible and require the insurer to administer its plan. Finally, under no circumstances should premiums be collected by the use of a plan sponsor’s cafeteria plan. Allowing pretax contributions will make the plan subject to ERISA and a possible Form 5500 requirement.

The items above are not all-inclusive. Please contact 5500 Tax Group if you need additional assistance to determine if you have unintentionally sponsored a plan and need to determine if a Form 5500 is required.

What should you do if you discover you haven’t filed a Form 5500 or it wasn’t done properly?
Failure to file a Form 5500 when required can subject a plan sponsor to substantial penalties. The Department of Labor offers a special program to file with reduced penalties if the plan sponsor has not been contacted about the failure. Please call 5500 Tax Group to help you file the required information.

If you have discovered an error on your Form 5500, you should amend your return as soon as possible. It is also important that your Summary Annual Report (SAR) be amended and redistributed to your participants. Let 5500 Tax Group help you to correct your filing and SAR and prepare or review your Form 5500 filings in the future to avoid errors.

Please note that while the Internal Revenue Service (IRS) no longer requires a Form 5500 filing for Section 125 – Cafeteria Plans, if you have a Medical Reimbursement Feature associated with your plan and more than 100 employees participate in the reimbursement feature, the DOL will require that you file Form 5500.

Final Note: The information provided above is a brief discussion of the general rules. If you would like a professional to analyze your plans, funds and programs for annual reporting and disclosure requirements under ERISA (Form 5500), please call or Email 5500 Tax Group to discuss your specific situation.

If you think your Form 5500 filing may be at risk, contact the 5500 Tax Group for a Complimentary Return Review. We focus exclusively on employee benefit tax, compliance issues, ERISA laws and regulation changes.