Wrap Plans and 5500 filing

[Nathan]

Question - Does anyone know if it is required that all insurance benefits under a wrap plan have the same policy year when you are trying to file only one 5500 for all the welfare benefit plans under a cafeteria plan? I thought I had read or was told that when using a wrap plan for all of an employer's welfare benenfits (Group Health, Dental, Medical FSA, DCAP) that the polices all had to have the same reporting year in order to be able to file only one 5500 form. Anyone have experience with this situation?

On a side note is it proper to file the 5500 for the cafeteria plan year (Aug. 1 to July 31) when the welfare benefit policies run 11/1 to 10/31 of every year? Not sure why the cafeteria plan year was originally set up as Aug. 1 to July 31 as aren't they normally calendar year plans (1/1 to 12/31)? If we want to change the cafeteria plan year to Jan. 1 to Dec. 31 do we just amend the plan document and file a short plan year for the period Aug. 1 to Dec. 31 and not report any activity on the welfare benefit plans, and then report the welfare benefit plan's activity on the new plan year (1/1/ to 12/31)? Any help with this would be great, most of my experience has been with Qualified DC plans in the past.

Nathan

[GMK]

Don't have an answer to your first question.

On your side note, many prefer to run the cafeteria plan year coincident with welfare plan year, 11/1 to 10/31.

However, for a discussion of why 1/1 to 12/31 is not a good choice,

see Jacmo's comments in this link:

http://benefitslink.com/boards/index.php?s...renewal+january

[Bill Presson]

I'm not aware of any requirement that insurance contracts be on the same year to be included in the same wrap plan.

We've been filing wrap welfare plans for years with differing insurance year ends and never had an issue.

[Nathan]

Don't have an answer to your first question.

On your side note, many prefer to run the cafeteria plan year coincident with welfare plan year, 11/1 to 10/31.

However, for a discussion of why 1/1 to 12/31 is not a good choice,

see Jacmo's comments in this link:

http://benefitslink.com/boards/index.php?s...renewal+january

Thanks GMK,

In our case I believe it makes scence to to stick with a calendar year cafeteria plan as we are setting up a Health FSA for a trucking company. I think it would be difficult to to try and explain to the EE's that their Health FSA election amount would be for a period other than a calendar year period. I tend to think that most emplyees thing of a calendar year for elections as it is the same period for taxes, w-2s ect. If you match up the Cafeteria Plan year to the welfare plan years 11/1 to 10/31 you always run the risk of it changing when the ER switches carriers.

[Guest jackmo]

Nathan--no requirement that all plans under one 5500 filing have the same plan years. HOWEVER, it certainly makes it a lot easier if they are all on the same plan year. For your insured plans, try getting schedule A info from a carrier for a period OTHER than their plan year (for the period you're wanting to report on your 5500 filing). In some cases, it's like pulling teeth, and almost impossible to get.

Re the 125 plan:

--It is proper to file the 125 5500 for the plan year stated in the documents. Regardless of your other welfare plan filing time periods.

--To change the plan year, yes, you amend the documents. Keep in mind that employees will only have a 5 month period of FSA elections and you might want to pro rate the elections rather than allow the usual full amount.

--Why would you not report activity on the other welfare plans? You can't NOT report it. Those are ERISA filings and you can't allow missed time periods from one filing to another. Currently, you are reporting the FSA on one filing, and the other welfare benefits on another filing (my best guess based on the info provided). To get the ERISA filing to coincide with the 125 plan, you would do the same thing that you did for the 125 plan, i.e., amend the welfare plan to create a short plan year from 11/1 to 12/31. But that means you will have to contact all insurance carriers and get them agree to a short plan year for renewal purposes, unless you want to be faced with the possible nightmare noted in the first paragraph above.

Good luck!

[Nathan]

Nathan--no requirement that all plans under one 5500 filing have the same plan years. HOWEVER, it certainly makes it a lot easier if they are all on the same plan year. For your insured plans, try getting schedule A info from a carrier for a period OTHER than their plan year (for the period you're wanting to report on your 5500 filing). In some cases, it's like pulling teeth, and almost impossible to get.

Re the 125 plan:

--It is proper to file the 125 5500 for the plan year stated in the documents. Regardless of your other welfare plan filing time periods.

--To change the plan year, yes, you amend the documents. Keep in mind that employees will only have a 5 month period of FSA elections and you might want to pro rate the elections rather than allow the usual full amount.

--Why would you not report activity on the other welfare plans? You can't NOT report it. Those are ERISA filings and you can't allow missed time periods from one filing to another. Currently, you are reporting the FSA on one filing, and the other welfare benefits on another filing (my best guess based on the info provided). To get the ERISA filing to coincide with the 125 plan, you would do the same thing that you did for the 125 plan, i.e., amend the welfare plan to create a short plan year from 11/1 to 12/31. But that means you will have to contact all insurance carriers and get them agree to a short plan year for renewal purposes, unless you want to be faced with the possible nightmare noted in the first paragraph above.

Good luck!

Jackmo - In our case we have an ER who has an old cafeteria plan year of Aug. 1 - July 31 which the 5500 has been filed for the Welfare Benefit Plans (Health, Life & Dental). The welfare benefit plans have a plan year of Nov. 1 - Oct. 31. For the cafeteria plan year that ended 7/31/09 it would have reported the welfare benefits for the period 11/1/08 - 10/31/09.

-- Can we not file a short cafeteria plan year for the period 8/1/09 - 12/31/09 with NO welfare benefit plan info on this return as the welfare benefit information for the next welfare benenfit plan year (11/1/09 - 10/31/10) would be reported on the new cafeteria plan year 1/1/09 to 12/31/09?

The FSA is not going to start or be effective until 1/1/10 so there currently is not a separate FSA filing. We are checking with the insruance carrier to see if they can switch to a calendar year insurance program or provide us with Schedule A info on a calendar year, but from what I have gathered from above is that it is not a big deal if the welfare benefits have a different plan year from the FSA and cafeteria plan as long as we are reporting all of the necessary periods for all plans. We are trying to create a wrap plan situation where we only have one 5500 for both the FSA and the Welfare Benefits.

-- Does the plan document for the caferia plan just need to mention that it is intended to be a wrap plan document and then list or reference the various welfare benefits?

-- Lastly, the current cafeteria plan document lists some AFLAC benefits that the employees are able to elect into, the eligbibility for these AFLAC benefits is same as it is for their group health, Life and Dental (90 days) but the effective date of participation is 1/1 and 7/1 rather than effective as of the entry date under the Employer's group health plan? Does this cause any concerns with a wrap plan?

Thanks for all your help - Nathan