Form 5500 Filing??

[HarleyBabe]

Received an email from the DOL saying they hadn't received my large plan filers Health and Welfare 5500 and they may need to file one. I am totally in the dark on that type of filing. Can someone direct me or explain if we need to file? I read the 5500 directions but am somewhat confused on funded and unfunded health and welfare plans. I need serious direction, quickly as this letter was sent to an old email address that is no longer active and I just found it. Apparently the client didn't receive anything either.

Thanks

[Bill Presson]

Here's what we tell clients (and our internal CPA staff). Hope this helps:

The requirements for filing a Form 5500 for a welfare plan are very often misunderstood. Examples of welfare plans include: medical, dental and vision

plans, long term and short term disability plans, group term life insurance, flexible spending accounts, accidental death and dismemberment insurance

and prescription drug plans.

Other plans may also qualify, but these are the most common. While many plans are required to file, the first step is to see if the plan is exempt.

The following plans are exempt from filing: governmental and church plans, workers’ compensation or unemployment compensation plans, voluntary

“employee pays all” plans (with some exceptions) and plans that meet the Small Plan Exception.

Small Plan Exception:

If a plan has fewer than 100 participants at the beginning of the plan year and is unfunded or insured, then no 5500 is required. Participants mean

employees actually covered under the plan and do not include spouses and dependents. Individuals that are eligible but not enrolled are not included.

An unfunded plan means that benefits are paid from the employer’s general assets. An insured plan means that benefits are paid through policies of

insurance OTHER than stop-loss insurance. A plan can be a combination of unfunded and insured.

If the plan does not meet any of the exceptions, then a 5500 must be filed and a summary annual report provided to each participant covered under the

plan.

The confusion generally started in 2001 when a requirement for cafeteria plans to file a 5500 using Schedule F was dropped. However, the requirement for the

underlying welfare benefits (insurance, etc) did not change.

[HarleyBabe]

okay so when you say benefits are paid from the employers general assets, what do you mean exactly? That is what is confusing me on the 5500 directions. If the client has a standard plan where they pay part of the premium and the employee pays the other part or they client pays all, what is that?

[Kitty]

Did you go through the checklist to determine if the plan is an exception? If it is, great! If not, then you've got more work to do.

I think part of what youre asking is how to go about determining if your plan is unfunded?

What type of plan is it? Do you know if your plan insured?

"An unfunded defined benefit pension means that no assets are set aside for benefits. Benefits are paid for as they are paid out from current workers contributions and current revenue.

An under-funded defined benefit plan is one where there are not enough plan assets to cover projected future liabilities payouts to both current and future retirees. The unfunded liability amount is the difference between projected costs and projected revenues, in current dollars."

Or, what you're asking is when an employer pays for say $600 a month of health insurance, and the employee pays $150, how do you fill out the 5500 to properly reflect who is paying what?

Can you clarify?

[HarleyBabe]

Unfortunately, I read everything that you had written already. This is why I posted because I am confused on those statements. The plan is more than 100. The plan has life insurance, disability, HSAs...It's very generous. I'm not sure what I need to do and what determines what I need to do and for which plan.

[Bill Presson]

Unfortunately, I read everything that you had written already. This is why I posted because I am confused on those statements. The plan is more than 100. The plan has life insurance, disability, HSAs...It's very generous. I'm not sure what I need to do and what determines what I need to do and for which plan.

Are the benefits insured? I assume so, but can you verify.

Is there a wrap document? I'm assuming not, but verify. If you don't know what it is, you don't have one.

So assuming you have insured benefits, you then determine which ones have 100 or more participants at the beginning of the year. For each benefit that meets that requirement, you have to file a 5500.

[SLuskin]

We can help you with this. We do 5500 filings and Delinquent Filer Voluntary Compliance Program filings every day. Alot of this depends on how many actual plans you have. Do you have 1 employee benefit plan with a number of parts (life, health, etc) or do you have a life plan, a health plan, etc. Your ERISA documents will tell you this.