Form 5500 Question (Again)

[bzorc]

I hate to pound this issue, but here goes:

Company has over 100 participants, and has properly filed their Form 5500 (Plan Number 501, for arguement sake) for the Welfare Benefit Plan, reporting Health, Life, Dental and AD&D Insurance information. Company also has a Flexible Spending Account plan, which allows employees to pay health insurance premiums on a pre-tax basis, and also allows employees to utilize reimbursement accounts for unreimbursed medical expenses. The Flexible Spending Account plan is administered by a payroll provider and has a plan number of 502.

The payroll provider states that no Form 5500 is needed for the 502 plan. I tend to disagree and would like to see a Form 5500 filed, since the Flexible Spending plan is paying for a Welfare Benefit. I went through past posts on this topic, and cannot get what I feel is a comfortable answer. Can anybody help? Thanks for any replies.

[papogi]

Although no 5500 is required for the Cafe Plan, a 5500 is required under ERISA since the FSA is a welfare benefit (unless you are a gov't or church group). T section 6039D suspension does not affect requirements to file under ERISA, so this plan must file.

[oriecat]

Are there schedules associated with a Medical FSA plan that would need to be filed, or just the basic 5500? If the FSA was included as part of the 501, would anything additional be needed?

[papogi]

Normally, no additional schedules are required. I see nothing wrong with including the FSA in with the 501 filing.

[bzorc]

How would you include it in the 501 plan? The Schedule A already filed for the 501 plan covers the insurance premiums. Is that sufficient? What would you file to record the non-reimbursed medical expense portion? What if the plan had the dependent care feature as well?

Thanks for the replies, they confirm my beliefs.

[papogi]

In this case, you can't include the FSA with the 501 plan since the IRS wants you to continue using the number assigned to it going forward. Once you have filed under 502, you should continue to file using 502 (just the main 5500). Putting it under 501 would have been a possibility from day one. Schedule A is not necessary for the FSA. The unreimbursed portion is general assets, and no accounting on the 5500 needs to be made. There is no 5500 requirement for Dependent Care.

[Guest DK Ellerson]

I agree that a 5500 (no schedules), Plan 502 should be filed for the Health FSA. However, I believe it only needs to be filed if there were 100 or more participants in the Health FSA at the beginning of the Plan Year.

[Guest AHayhow]

We filed a 5500 form for our health care FSA and since it has 666 participants reported on Line 6, the IRS sent us a notice asking us to file a Schedule H. I have never filed a Schedule H and in looking through the 5500 Instructions and at the Schedule H it looks like this should only be filed for a Pension Benefit Plan. Has anyone filed a Schedule H for a health care FSA/welfare benefit plan before?

Also, for the health care FSA should the Welfare Benefit Features Code be 4A Health (other than dental or vision)? Thanks for your help.

[Guest terryh123]

Yes, 4A is the right code. Make sure you check boxes 9a(4) and 9b(4), "general assets of the employer", and none of the other boxes, for funding and benefit arrangements. That should answer any inquiry regarding Schedule H, which is only required if there are plan assets, i.e. a trust.