life insurance plan

[wsp]

Two years ago, prior to my coming to my firm, my client merged a union life insurance policy into the larger salaried policy to save a buck. Now, no one can provide me with the information to file the 5500's for each plan. Did we effectively terminate the union plan? Should we file best guess estimates for this year and segregate the policies again? Any ideas on how to handle this? Oh yes, and did I mention that a 5500 for the union was not filed last year. Their data was commingled with the salaried group.

[KIP KRAUS]

What do you mean no one will provide you with the 5500 information? The insurer is required to provide this to the Company/policyholder.

[wsp]

meant, they will not/can not split out the data by individual. They have no clue who is in what plan. As far as they are concerned it's a single plan/single policy.

[mroberts]

Yes, you're probably stuck. Insurance carriers provide 5500s based on policy number, not by sub codes or whatever other groupings are out there. Can you internally determine how much premium was paid by class?

[wsp]

probably could in regards to the premiums, but not expenses, fees, or any benefits paid. All are required items on 5500. So, any ideas or advice on how to proceed?

[mroberts]

You could prorate it by class. If you know expenses are going to be $15,000 and the union premium is twice as much, then the expenses for the union group should be $10K. It's not going to be perfect, but remember, 5500 information doesn't have to be exact.

[KIP KRAUS]

What you may want to do for the future is to have the insurer bill you for two sub groups of employees, this done on a regular basis. Then they can provide the 5500 information on each group.

In the mean time mroberts’ suggestions seem logical to me.