Schedule C Required?

[R.G.]

An employer has over 100 participants and has a stop loss policy for it's health insurance benefit.  They received a Schedule C from the insurance carrier.  It's my understanding they don't have to complete the Schedule C if there isn't a trust because there aren't any plan assets.  Can someone please confirm?

[Flyboyjohn]

Confirmed

[KJohnson]

I would make sure you are confident there are no plan assets and you still fall under Technical Release 92-01.  This can be tricky with stop loss.

https://www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/advisory-opinions/2015-02a

In particular these four factors.

First, except for the use of participant contributions to partly fund the medical benefit portions of the Plans, the facts surrounding the purchase of the Policies will be identical in all material respects to the facts surrounding the purchase of the stop-loss insurance policy described in Advisory Opinion 92-02A. Second, with respect to the use of participant contributions to fund in part the benefits under the Plans, you have put in place an accounting system that ensures that the payment of premiums for the Policies includes no employee contributions. Third, the purchase of such insurance will not relieve the Plans of their obligation to pay benefits to Plan participants, and the stop-loss insurer has no obligation to pay claims of Plan participants. Fourth, the Policies will reimburse the Plan Sponsors only if the Plan Sponsors pay claims under the Plans from their own assets so that the Plan Sponsors will never receive any reimbursement from the insurer for claim amounts paid with participant contributions.

 

[MRestum]

According to the 5500 Instructions, "Health and welfare plans that meet the conditions of the limited exemption at 29 CFR 2520.104-44 or Technical Release 92-01 are not required to complete and file a Schedule C."