Welfare Plan 5500 Filing

[Guest dovey]

A client which files a 5500 for their welfare plan also owns two subsidiaries. Their question was whether or not the two subsidiaries were subject to the 5500's filing for their welfare plan. Since they are a part of a controlled group, I'm inclined to say "yes." Since they would be considered a "single-employer" for filing purposes. However, both subsidiaries have less than 100 participants and is an unfunded & fully insured plan. Which falls into the exempt status for the 5500's filing requirement. Does being a part of a "single-employer" plan that is currently filing a 5500 for their welfare plan supercede the "exempt" status?

[BeckyMiller]

I think the question comes down to whose plan it is. If each subsidiary has a separate plan, then the filing requirement would be based upon that separate plan.

[Moe Howard]

Becky is correct.

Do the subs have the same plan as the parent?

It's easy to determine. Just compare each Summary Plan Description that each of the three corps uses. If each of the three SPDs all state the same "plan name" then there is only one plan. In which case. the 5500 must include all three corporations.

Although a controlled group exists, that won't be your basis for determining if the subs' insurane policy info has to be reported on a 5500.

The controlled group rules for pension plans don't apply to fully insured welfare benefit plans.

[Ron Snyder]

The controlled group rules for pension plans don't apply to fully insured welfare benefit plans.

IRC Section 414(t). "Application of controlled group rules to certain employee benefits

(1) In general

All employees who are treated as employed by a single employer under subsection (b), ©, or (m) shall be treated as employed by a single employer for purposes of an applicable section. The provisions of subsection (o) shall apply with respect to the requirements of an applicable section.

(2) Applicable section

For purposes of this subsection, the term "applicable section" means section 79, 106, 117(d), 120, 125, 127, 129, 132, 137, 274(j), 505, or 4980B."

[Moe Howard]

veb, ok you got me. IRC 79 & IRC 106 can relate to fully insured ....life (79)... and fully insured medical (106), which are both welfare benefit plans.