Ending a self-insured plan.

[Guest Gayle Dax]

Is there a form or a formal notice that must be sent to the IRS/DOL when discontinuing a partially self-funded health plan and becoming fully insured?

[KIP KRAUS]

Gayle:

Unless you have been funding the self-insured claims via a 501©(9)trust or some other type of fund, in my opinion changing from one financial arrangement to another does not require reporting to anyone. If you are dropping a vendor in favor of another vender, you simply inform the IRS via your 5500 report by completing the Schedule C, which informs them of vendor changes.

[Greg Judd]

Gayle, I believe Kip's nailed this one.

It's a good question to post, because more than a few firms have traced this path over the past 3-4 years--and may soon re-trace it, as the managed care firms' mania to buy market share by swallowing costs has left many gasping for financial air.