Form 5500 & Policy Year change mid-yr

[Guest SuzieQNEC]

Group Life plan on a calendar year basis changed carriers midyear in 2008 on 4/1. The Sched A for the old policy will reflect zero participants at eoy. The new policy is a 2 yr policy through 3/31/10. So the 1st policy yr ends 3/31/09 which would be included in the 2009 5500 filing. The 2008 form therefore will show zero participants at eoy since only the Sched A for the old policy will be included. Does that sound correct?

[Guest Form5500]

Yes, that is correct. All information reported on the Schedule A must be for the policy year ending with or within the plan year, or for the plan year if records are maintained on that basis. So based on your facts above, if your plan year is December 31 and the contract year of began on April 1, 2008 (4/1/08 - 3/31/10), the information reported on the filing for plan year ending December 31, 2008, should be for the policy year ending March 31, 2008 (nine months earlier).

Also as a reminder, a Schedule A is not required to be filed for self-funded plans, ASO contracts, fidelity bond coverage, one participant plans or for a plan that invests in a master trust or that itself invests in insurance contracts or policies.

[Guest SuzieQNEC]

Thanks for the reply. Inasmuch as there is an outstanding policy at 12/31/08 (w/yr end 3/31/09) and we do know how many participants were covered at 12/31/08, would it be ok to list that number on the eoy partic count on the 5500 instead of zero, even though there will be no Sched A for that particular policy?

[Guest Form5500]

Are you talking about the Schedule A participant count or the participant count on the Form 5500 participant count information? If the former, do not report anything other than what is provided to you on the Schedule A itself.

[Guest SuzieQNEC]

thanks for checking back in. Was talking about count on form 5500. though it makes me wonder if the count on Schedule A for the prior policy that ended 3/31/08 would show those covered on that date.

Count possibilities are:

5500-0

or

5500-400 for new policy - mid-policy yr though no sched A reported for that one

and

Sch A-500 for closed policy

or

Sch A - 0 because though closed policy covered 500 on its last day, the policy ended so there is no longer anyone covered

[Guest Form5500]

Keep in mind that a welfare benefit plan with fewer than 100 participants at the beginning of the plan year is: 1) unfunded, 2) fully insured, or 3) a combination of insured and fully insured is not required to file a Form 5500.

Form 5500 (Lines 7a-7f)

For participants under a welfare plan, do not count dependents or beneficiaries. An individual is no longer a participant in the welfare plan if he or she is no longer eligible to receive benefits under the plan or is otherwise no longer identified as a participant under the plan.

Line 7a - calculate the total number of active participants at the plan's year-end, count everyone who is eligible for benefits, even if not everyone takes advantage of the benefits.

Hope you find this helpful.