Amending 5500 vs. DFVCP and Wrap

[IhrtERISA]

Greetings:

Plan sponsor is in the process of winding down and terminating all of its benefit plans. All plans have 100+ participants. It came to our attention that over the past number of years, plan sponsor had been filing only ONE Form 5500 for ALL of its ancillary benefits (AD&D, LTD, Life Insurance, PPO, etc) in addition to its partially-insured health plan (medical & RX drug). Meanwhile, a (mega) wrap plan document was never in place bundling these benefits.

It is our position that a retroactive wrap document cannot be used to retroactively bundle benefits which were previously and incorrectly reported under a single Form 5500 (although it does permit a single filing under DFVCP and help with a single $4,000 penalty).

That said, is it possible that this is an Form 5500 amendment issue (since a Form 5500 was in fact filed each year, just incorrectly and for the wrong plan name) and thus inappropriate to be filed under DFVCP? I am more inclined to recommend correction under DFVCP since I see this as a non-filer issue (Form 5500 that was filed was under a non-existent plan name) and client would rather pay the $4,000 filing fee and rest assured that the matter has been put to bed. 

Lastly, since only one Form 5500 was filed covering both (a) the partially-insured benefit plan (which has an ERISA plan doc), and (b) The fully-insured ancillary benefits (which does not have a plan document), which do you think is the better course of action:

(1) Include both the partially-insured benefit plan (which has its own plan document) and the filly insured anciliary benefits into a mega wrap plan document and file only one Form 5500 under DFVCP

(2) Exclude the partially-insured benefit plan from the mega wrap document (so just bundle the ancilary benefits) and file 2 seperate Form 5500s. 

Thoughts and Feedback would be most appreciated. Thank you!

 

[Bug on my window]

It seems to me that if you are creating a wrap plan anyway, for 5500 purposes it shouldn't matter if you do two separate plans or one. There may be other reasons to not include the ancillary benefits into the wrap that the lawyers who lurk here may have something to say about.