Company Health Insurance - Not A Plan Asset

[Alex Daisy]

We took over a Plan in 2007, but the 2006 5500 is showing Oxford Health Insurance on the 2006 Schedule A.

Oxford Health Insurance is not an investment option in the Plan, and has nothing to do with the 401(k) Plan.

I don’t believe it should be reported on the 401(k) 5500? Do you agree?

Should it be reported by the company on a separate 5500?

[jpod]

Believe it or not, this is a common situation with employers who "go it alone" and don't have professional assistance with 5500 filings. These employers at least read the instructions and give it a college try, but they are confused by the nuanced definition of "plan" and get lost wading through the instructions. The Schedule A does not belong on the 401k plan's 5500 and should be a scehdule to a separate 5500 filing, assuming the welfare plan is large enough to require a 5500 filing.

[Guest LMPett]

Alex -

If the acquired company's medical plan had over 100 participants at the beginning of the plan year (not the end of the plan year, as the Schedule A will show), you will need to file a Form 5500. (If the medical plan had assets, ie, a trust, then you will need file regardless of size).

Other insured or unfunded welfare plans with 100+ are required to file also (e.g. life, disability, dental, vision).

This must be filed separately from your 401k report, with ERISA plan number starting at 501.

If the Oxford and other welfare plans have been canc'd because these employees are on your benefits plan now, you will need to file a final return.

The best way to see what the company did before you took it over is to go to www.FreeErisa.com and look up the filings by company name and state.

LMP