Cafeteria Plan Filing

[jala]

Normally we work with a "Wrap Document" and have to file only one 5500. We have been posed with questions regarding filing when three separate cafeteria plan documents are maintained.

I am told that the first document covers: Medical insurance premiums, the second cafeteria plan document covers: Long Term Disability and the third document covers Life Insurance.

They have just crossed the 100 participant threshold and will be filing for the first time.

My questions in regards to filing are:

1) The number of participants in the medical plan (under Document #1) has greater than 100 participants and the number of participants are less than 100 in the LTD(Doc #2) and and less than 100 participants in Life Insurance(Doc #3).

Am I correct that they would be required to file a 5500 for the medical plan under Doc #1 and not have to file for the LTD and Life under the other two Docs?

2) Same situation as above, but the employer funds the LTD and Life Insurance.

Since it would be ALL employer funding and NO employee pre-tax money, is it necessary for a cafeteria plan document at all?

Are there filing requirements for LTD and Life Insurance components if premiums are paid by the Employer?

I would appreciate any help with this.

Thank You

[E as in ERISA]

I don't think your facts make it clear how many plans there are. Are the cafeteria plan for the medical and the medical itself together one plan? Or is the cafeteria stand alone? So those are two separate plans? Same for LTD and insurance? You are saying the medical is insured through a carrier (not self-insured)? The filing is generally for the underlying benefit not the cafeteria plan.

[jala]

I don't think your facts make it clear how many plans there are. Are the cafeteria plan for the medical and the medical itself together one plan? Or is the cafeteria stand alone? So those are two separate plans? Same for LTD and insurance? You are saying the medical is insured through a carrier (not self-insured)? The filing is generally for the underlying benefit not the cafeteria plan.

[jala]

I don't think your facts make it clear how many plans there are. Are the cafeteria plan for the medical and the medical itself together one plan? Or is the cafeteria stand alone? So those are two separate plans? Same for LTD and insurance? You are saying the medical is insured through a carrier (not self-insured)? The filing is generally for the underlying benefit not the cafeteria plan.

Client has 3 separate cafeteria plan documents:

Self-Insured Medical coverage is the only component in plan Doc. #1.

Life insurance coverage is only component in plan doc #2 and LTD is only component in plan doc #3.

I agree filing is not required for the"cafeteria plan" itself.

Do you agree that filing is required for medical plan under Doc #1 since they cover more than 100 participants?

Do you agree that filing is not required for the Life Insurance component under doc. #2 if the number of participants are less than 100? Same for LTD component under Doc #3?

Also, what if the employer contributes 100% of the life insurance and LTD premiums on behalf of the employees? Is a cafeteria plan even necessary? Are there any filing requirements under this scenerio?

Thank you for responding to my questions.

[Jilliandiz]

I called the DOL on a similiar issues yesterday. YOu can have a Cafeteria Plan and a Welfare Plan..but you can also have them govered under the same document....to make for one filing...so here's what they said.

1. If a Cafeteria Plan has over 100 pp at the beginning of the plan year and the plan includes "any" type of welfare benefit (vision, dental, medical, etc.) then a 5500 should be filed for that plan showing the welfare benefits, the DOL only cares about the welfare benefits in the plan.

2. However, a Cafeteria Plan and Welfare Plan can also be govered under one plan document, if that's the case then only 1 5500 needs to be filed reporting the welfare benefits, you can combine the info.

3. If you have separate documents for each plan, then they stand alone and should be treated separately.

[jala]

I called the DOL on a similiar issues yesterday. YOu can have a Cafeteria Plan and a Welfare Plan..but you can also have them govered under the same document....to make for one filing...so here's what they said.

1. If a Cafeteria Plan has over 100 pp at the beginning of the plan year and the plan includes "any" type of welfare benefit (vision, dental, medical, etc.) then a 5500 should be filed for that plan showing the welfare benefits, the DOL only cares about the welfare benefits in the plan.

2. However, a Cafeteria Plan and Welfare Plan can also be govered under one plan document, if that's the case then only 1 5500 needs to be filed reporting the welfare benefits, you can combine the info.

3. If you have separate documents for each plan, then they stand alone and should be treated separately.

Great, this is exactly what I was looking for and expected.

Separate documents-- each stand alone--therefore separate filings.

What is your understanding if the employer contributes 100% of the welfare benefit premiums on behalf of the employees? Why would a cafeteria plan document be needed if no employee pre-tax deductions are made? Is there a filing requirement under this circumstance?

[Guest b2kates]

Can employee choose cash instead of receiving benefit? That is fundementally what the cafeteria is all about; even if fully employer paid.

[jala]

Can employee choose cash instead of receiving benefit? That is fundementally what the cafeteria is all about; even if fully employer paid.

My understanding is that they cannot.

[TPApril]

Just confirming my understanding of this thread as related to a different case. Once benefits are set up as a cafeteria plan, then all forms of benefit should file a Schedule A, even if some have less than 100 participants? in this situation, plan sponsor went over 100 employees in 2010 so 2011 is first filing. Only one of the four carriers have over 100 ee's. They are setting up a wrap plan, so that is correct they file all four Schedule A's at this time? Or can they not create wrap plan and file only for the one benefit and wait to the first year at least one other carrier has over 100 ee's?

[Guest morris]

TPApril: No. You are mixing 2 different laws when it isn't necessary. ERISA 5500 filings have nothing to do with 125 plans. This thread is concerned with ERISA filings regardless of whether or not there is a 125 plan. Forget the 125 plan(s). They do not require 5500 filings. Drop 125 plans from the conversation.

Your Question: "Once benefits are set up as a cafeteria plan, then all forms of benefit should file a Schedule A, even if some have less than 100 participants?"

Answer: NO. BECAUSE ERISA FILINGS HAVE NOTHING TO DO WITH HOWEVER YOU SET UP YOUR 125 PLAN(S).

"in this situation, plan sponsor went over 100 employees in 2010 so 2011 is first filing".

To be more accurate, the 2010 plan year is the first filing (which happens in 2011).

"Only one of the four carriers have over 100 ee's."

To be more accurate, only one of the 4 benefits has over 100 participants

" They are setting up a wrap plan, so that is correct they file all four Schedule A's at this time?"

It would probably be foolish to set up an ERISA megawrap plan (which would encompass all 4 benefit schedule A's into one 5500 filing) at this time if the other 3 benefits have less than 100 participants. Think about it: the other 3 carriers might balk at you forcing them to provide a schedule A when their particular benefit has less than 100 participants. Furthermore, why make it complicated? Right now, all you HAVE to do is file one 5500 with one schedule A.

For Jala: As per the note above to April--IGNORE how your 125 plan(s) is structured and concentrate on how your ERISA plan(s) are constructed.

Your medical plan, LTD and Life are all ERISA plans, regardless of who pays what, or whether there is a 125 plan. However, the only one that has more than 100 participants is the medical plan. You would file one 5500 with one medical schedule A. That's it. No ERISA (5500) filing for the LTD and Life because they don't have more than 100 participants.

THE ONLY THING THAT WILL REQUIRE YOU TO EVEN THINK ABOUT 125 IN THESE TWO CASES IS THE ASSIGNMENT OF THE PLAN NUMBER ON THE ERISA 5500. You are going to have to assign a plan number. Since both of you already have 125 plans in place, those plans will have plan numbers assigned to them. They will be in the 500 series. For example, if there are 3 cafeteria plans, they might have plan numbers 501, 502, 503, etc. YOU WOULDN'T USE THOSE PLAN NUMBERS IN YOUR 5500 FILING. In this example, you would use the next available plan number--504, for the ERISA filing.

Hope this helps!

Hope this helps!

[Guest odessa477]

Can employee choose cash instead of receiving benefit? That is fundementally what the cafeteria is all about viagra online; even if fully employer paid.

As per what Hillary Clinton said in one of her Public Speeches: if employers want to subsidize employee benefits, make it cafeteria style.

[TPApril]

morris - your post of a year ago is appreciated. Yes I get it now. 2 coments though:

I stand by 2011 being the 1st filing when plan went over 100 1st in 2010.

multiple carriers of same benefit - say company has 2 medical insurance options - each has 52 covered staff. Would this be considered 1 benefit then that files 1 5500 with 2 schedule A's? or dont have to worry and file?

[Bill Presson]

morris - your post of a year ago is appreciated. Yes I get it now. 2 coments though:

I stand by 2011 being the 1st filing when plan went over 100 1st in 2010.

multiple carriers of same benefit - say company has 2 medical insurance options - each has 52 covered staff. Would this be considered 1 benefit then that files 1 5500 with 2 schedule A's? or dont have to worry and file?

I think it depends. But based on your description, I don't think you would be required to file.