Exposure for non-filing

[TPApril]

What is the risk/exposure for unfunded/fully insured welfare benefit plans that do not file 5500's, or that file with incorrect information such as participant counts?

[TPApril]

I have another question. I noticed some plans ask their carriers to issue off-year Schedule A letters that correspond to the plan year rather than the policy year which is different. How important is it that the actual policy year be reported?

Example:

Plan Year - 1/1-12/31

Policy Year - 4/1-3/31

Schedule A letter is issued for 1/1-12/31

[Bill Presson]

What is the risk/exposure for unfunded/fully insured welfare benefit plans that do not file 5500's, or that file with incorrect information such as participant counts?

It's the same for any plan required to file a 5500. The filing penalties can be extreme especially compared to the relative ease of filing a welfare 5500.

As to your second question, we've filed 5500's for plans that include benefits with different policy years. I've never had it questioned by the IRS or DOL as long as we remain consistent.

[TPApril]

Thank you Bill - second question is not about different policy years on one wrapped plan Form, but when the reported Schedule A information does not actually correspond to the policy year because they have been advised to run Schedule A based on plan year.

[Bill Presson]

Thank you Bill - second question is not about different policy years on one wrapped plan Form, but when the reported Schedule A information does not actually correspond to the policy year because they have been advised to run Schedule A based on plan year.

I would use the schedule A they provided you and keep that form in the file.

[TPApril]

Any idea where to find a resource on the actual accounting that goes into how an Insurance company fills out Schedule A for experience rated contracts? The 5500 instructions have nothing (they don't even refer to the entire section in the instructions!). Further question, does that section on Schedule A have to correspond to Schedule H or can the accounting approach be different?