Amending Form 5500s

[Guest AEA]

I do not normally prepare 5500s, but I often get questions when things go wrong.

Client maintains a wrap-around document covering all of its welfare benefits (except for the cafeteria plan). The document provides for group health insurance, but does not specifically name an ins company or policy. The SPD only refers to BCBS which provides insurance for the vast majority of employees. However, I found out recently that the client also keeps an HMO for employees in one division in one state (left over from an acquisition and may only be open to employees who were there when the acquisition took place). It appears that this HMO has not been included in the audits nor has it been reported on the Form 5500 for the last several years.

The client and I felt that the audits and the prior years' 5500s should be amended to include the HMO. The auditor doesn't agree - they think that separate 5500s should be filed, but haven't given a good explanation except that the plan's SPD only talked about BCBS. The SPD covers all employees of the client, most of whom weren't eligible for the HMO.

Any thoughts?