welfare plans upon reaching 100

[TPApril]

When a company exceeds 100 ee's, and there are two medical carriers in the medical plan, each with under 100 ee's, do they start to file 5500? for that matter, if they are now filing for one benefit, but another benefit has less than 100 ee's covered altogether, does that one file too? with growth projected to be slow, would they wait then before creating a wrapped plan or create one now and file all benefits, even though some have less than 100, even when adding up the different carriers?

[Guest KennyH]

I am going to piggy back on this post since my question is related. I am trying to determine filing requirements for a client, am not very familiar with welfare plan requirements and am not confident in my reading of the various instructions/regs/etc. My experience is in Pensions but I am trying to understand what is permitted and what is required with regard to how to define a "plan" in a H&W context.

Client owns several related business (in-whole or in-part with varying partners) that for the most part all operate independently. There is a single Cafeteria Plan but each independent business provides medical and other insurance benefits under unrelated policies (i.e. business A has medical/dental/life/ADD under policy 1; business B has medical/dental/life/ADD under policy 2; etc.). Assume for the moment that in total all businesses together exceed 120 employees during 2012, but each business by itself remains well under 100 participants. It is my understanding that the cafeteria plan and each independent policy can file 5500s seperately, or they can all be filed together. Is that correct? If they choose to file each seperately, is the Cafeteria Plan required to file in 2014 (assuming calendar year plan year) but the other "plans" can wait until they actually cover more than 100 participants?

TIA!

[SLuskin]

First, Cafeteria plans themselves do not file 5500s. That was done away with in April, 2003. The component parts are the welfare plans which must file if required.

You must determine "Who is the employer"? You must count all participants in a controlled group. It could be a parent/child group or a brother/sister group. If there are more than 100 participants on the first day of the plan year, then the 5500 is required.

How many is always the question. Do you file 1 for the Welfare Benefits Plan, or 1 for the medical, 1 for the dental, 1 for the life, etc. You have to look at the document.

If no document, I would look at the language in the Employee Handbook. (Then I would get a plan document).

[TPApril]

I can't say I fully understand my original question of 3 years ago, but here's 2 related questions:

1. Similar to KennyH's question above - there is a control group, two separate companies, but same ownership, so being treated as one control group in one plan. As they are separate companies though, would they be treated as a Single Employer or Multiple Employer?

2. New company effective 2/1/15. As an offshoot of a prior company, they start with > 100 covered ee's. They set as a calendar plan year, and the medical plan goes into effect on 3/1/15.

Question is - do they need to file the 5500 for 2015? I cant seem to tell if they started with over 100 covered ee's since the moment there was coverage there were over 100, or since coverage started a month later if they were really 0 at the boy in which case no 5500 until 2016?

[Bill Presson]

1. A controlled group is a single employer.

2. Filing is not dependent on employees; it's dependent on participants.

[Flyboyjohn]

5500s are filed based on plans, not based on employers or controlled groups of employers. A single employer can have multiple plans for different segments of their workforce and conversely groups of employers (whether controlled or not) can jointly sponsor a single plan.

So your bottom line question has to be how many welfare benefit plans are you dealing with and how many participants does each plan cover.

Which then leads to the discovery that your client doesn't have a plan document or SPD for its group health "plan(s)" that would absolutely answer the question so you'll probably have to fall back on the contract(s) with the insurance carrier(s) and how many participants are covered by each contract.

That being said if the client was offering 2 different health insurance contracts to the same group of employees I wouldn't recommend taking the position that they had 2 health insurance plans if it resulted in both "plans" falling under the 100 participant filing threshold.

[TPApril]

1. A controlled group is a single employer.

2. Filing is not dependent on employees; it's dependent on participants.

Bill - i have corrected and edited my question to say 'covered ee's'. Thank you for pointing that out.

Still hoping for some thoughts though .