Unfunded welfare benefit plans

[Guest Mfcavo]

If an employer has a self funded health plan (i.e., it pays claims out its own assets) and employees contribute to the cost of the plan, is the plan "unfunded" for the purposes of the 100 employee filing exception?

[Greg Judd]

Page 3 of the 1999 edition of the Form 5500 instructions makes it sound like most employers with fewer than 100 employees should file Form 5500, unless the plan in question is "associated with a fringe benefit plan under Code Section 125", and meets the requirements of IRS Technical Release 92-01.

So, it would seem the mere fact of employee contributions wouldn't of itself exempt the self-funded ("unfunded") plan.

[Guest Mfcavo]

By coincidence I had just read the same instruction before I got your message. I read it to mean that if employee contributions are made through a Section 125 Plan in accordance with 92-10, then the plan can be treated as unfunded. Do you know of any online resources where I can find the release? Thanks for the help.

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