Welfare Benefit Plan 5500 wrap or separate filings

[Tom]

We unfortunately file 2 WB 5500s for large clients - out of necessity from years ago.  They have pretax cafeteria insurances covered under the 5500.  We file the 5500 as one filing covering all the benefits.  We provided a cafeteria plan document listing the insurance benefits. 

Their new benefits broker is taking this over (thankfully) and are asking for a wrap document.  One does not exist that we can see.  There is an Summary that looks like a SPD that someone produced some years ago but they tell me that is not an SPD.  It has a summary of each benefit structure, eligibility, benefits, etc.  That led us to believe they had a wrap document.

 The issue now is for them to draft the wrap document now and move on, or amend past 5500s and file for each benefit structure since there was no wrap document.  Problem there of course is - filing 5500s as "new" for 3 years ago will be late and DFVC will apply.  Going forward without amendment/filing separate they say carries risk of not being in compliance by not having a wrap document.  

Comments? Thank you.

[Brian Gilmore]

The technically correct approach would probably be to amend past 5500s and file for each line of H&W coverage.  The reality of what happens in practice (at least from my experience) is the employer gets comfortable with some form of argument that there was an umbrella mega wrap in place encompassing all of the ERISA H&W benefits the whole time--even if not perfectly documented.  Then you get a proper set of wrap docs in place asap (amended and restated) and continue to file a single plan 501 going forward.  That's typically the most reasonable approach given how burdensome and wasteful it would be to perform a big DFVCP project for all lines when virtually nobody files that way anymore anyway.