5500 Question 9a and b - item 4

[Guest mdbusapp]

We have a Section 125 plan that includes both our insurances and our FSA. In the past, we have only checked box 1 for Questions 9a and 9b. But I think we should also be checking box 4.

I think we fall under "insured and/or unfunded". There is no trust fund that the employee Cafeteria/Section 125 FSA deferrals go into. Instead the employer holds it in his own company accounts. That's how the deferral avoids treatment as earned income by the employee. The employer pays valid FSA expenses as they are presented by the employees (we use a TPA for administering what is valid).

That's why I was thinking that the box for Ques 9a 4 and 9b 4 should both be checked for "General assets of the sponsor".

Appreciate any help from a more experienced 5500 filer.

[SLuskin]

We have a Section 125 plan that includes both our insurances and our FSA. In the past, we have only checked box 1 for Questions 9a and 9b. But I think we should also be checking box 4.

I think we fall under "insured and/or unfunded". There is no trust fund that the employee Cafeteria/Section 125 FSA deferrals go into. Instead the employer holds it in his own company accounts. That's how the deferral avoids treatment as earned income by the employee. The employer pays valid FSA expenses as they are presented by the employees (we use a TPA for administering what is valid).

That's why I was thinking that the box for Ques 9a 4 and 9b 4 should both be checked for "General assets of the sponsor".

Appreciate any help from a more experienced 5500 filer.

You are correct!