5500s Premium Only Plan

[thepensionmaven]

Ran across a prospect that sponsors a Prem Only Plan.

Account says no 5500-SF needed.

[david rigby]

Is there a question?

[thepensionmaven]

Yeah, is he correct?

Mentioned same for 125 plan

[Bill Presson]

22 hours ago, thepensionmaven said:

Yeah, is he correct?

Mentioned same for 125 plan

If it's under 100 participants then a welfare benefit plan is generally not required to file.

[austin3515]

And Participants is just employees.  An employee who includes his wife and two kids on the insurance is counted as 1.  Although full disclaimer I am not a health and welfare expert, but I have been asked this question about 1,000 times.

Also, a Section 125 "plan" is NOT a plan.  It's a tax code provision allowing pre-tax contributions to be made to REAL PLANs, like health insurance, dental insurance, etc.

Anyway, I don;t know enough to be dangerous, but I do know that this notion of a "125 plan" is a huge misunderstanding out there.

[Mike Preston]

13 hours ago, austin3515 said:

Also, a Section 125 "plan" is NOT a plan.  It's a tax code provision allowing pre-tax contributions to be made to REAL PLANs..... 

Rut roe. 

[austin3515]

What does "Rut roe" mean?

Do you agree that health plan can be funded with premiums paid via a 125 or not, but it's still the same health plan?

[Belgarath]

Austin - I'm far from a 125 expert myself, as many of my previous posts would confirm! However, although it may be a matter of semantics, most people would consider a Section 125 "arrangement" as a "plan." It may be instructive to note that the IRS proposed Section 125 regulations themselves clearly label it all as cafeteria PLANS. (My emphasis.)  

I agree that it isn't a typical "plan" in what we would consider the normal sense in the qualified plan world as it does not, in and of itself, provide any benefits - but there must be a written "plan" document to allow the employees to choose between taxable and allowable non-taxable benefits.

I agree that you have the same health plan either way - just that if employee is paying a share of the premiums, then those employee premiums are not pre-tax unless you have a cafeteria "plan" in place.

So I think we are agreeing, other than a minor disagreement on terminology.

[austin3515]

I can;t be repsonsible for semantics in this arena!  But let me put it this way which is really my point.  There would not be a 5500 filing requirement for a 125 Plan.  So in that sense alone (which is what I intended) it would not be a plan.  Do we agree on that?

The Plans which are funded by those premiums are the plans for 5500 purposes.

[Belgarath]

Well, yes and no. If the 125 plan is done as a "wrap" document, then there is only one 5500 form filed, which encompasses all of the underlying "plans."

[Belgarath]

P.S. I just found this very helpful resource on the internet re 5500 filings:

https://www.ebcflex.com/portals/8/PDF/webinars/ERISA-Compliance-Wrap-and-5500-QA.pdf

[austin3515]

Nice, thank you!  I've always wondered about how you knew if your dental plan and your health plan were one or two plans.

I'll read this through one day!

[HF-Compliance]

Hello all, I am a health and welfare filing expert, and I would like to add to the answer. First, just a POP plan does not require a Form 5500 filing, as I think has been established. There was a time in ancient ERISA history that it was ...

However, a health FSA (flexible spending account under the cafeteria plan rules) with 100+ participants is considered a health plan, and does require a Form 5500 filing. It is generally - almost always - incorporated with the rest of the "Wrap" plan filing.

POP = 5500 no

Health FSA = 5500 yes