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Medical, Rx and Vision plans are available to employees of a large company


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I've been trying to explain that while no 5500 needs to be filed for the cafeteria plan, there should be 5500s filed for the welfare benefit plans. Is it possible that there is no underlying plans because the insurance company handles everything? When I ask for plan documents I only get things that relate to the cafeteria plan.

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katieinny, I'm not sure if you got the answer you are looking for from the 5500 instructions, but the plans may be employee owned policies, a/k/a Voluntary or Supplemental Insurance. Because these are typically 100% contributed to and owned by EEs, sold at the worksite and payroll deducted via a list bill, 5500s are not required.

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However, if any are group plans, and they had over 100 participants on the first day of the plan year, they need a 5500. Same thing if the Cafeteria plan has a medical FSA. Needs a 5500 for the medical FSA but not the "cafteria plan". Lots of CPA's have no clue about this stuff and give awful advice.

The insurance carriers will prepare the Schedule A, but generally they do not prepare the 5500.

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I think the problem I'm having is getting across to the employer what a "plan" is. They (and the CPA) are only focusing on the cafeteria plan as if that's "the plan" that governs the health care, Rx, vision and dental. I can't seem to make them understand that all the cafeteria plan does is allow employees to pay their share of the costs with pre-tax dollars. I have a feeling that the insurance company provides a basic contract, which is probably the plan. Is there a situation where the insurance company files the 5500?

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You should be able to explain and show that they have more than one item called a "plan" by having them provide and then look at the plan documents. They should have at least 2. One for the employee benefit plan which states the benefits the employer is providing and how. The other for the section 125 cafeteria plan allowiing for pre taxing of employee premiums.

The fact that there are 2 different plan documents should explain that there are 2 different plans.

The fact that they can change insurance coverage provider without changing plan document should show that the health insurance coverage is not the plan but just an ittem under the plan.

Then you can refer to the actual language in section 125 which explains the underlying coverage choices.

I do not know of any provider who prepares, much less file, 5500s.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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