Replacing old plan with new without amendment?

[Guest m thom]

An employer established a new cafeteria plan (plan 501) effective 1/1/94. In 1996 the employer decided to change insurance carriers for 1997 and succeeding plan years. The insurance company drew up a new plan document, showing 1/1/97 as the effective date and 1997 as the first plan year. The new plan document contained no plan number. The employer continued to file 5500 C/R in 1997, using 501 as the plan number and 1/1/94 as the plan's effective date. What can or should be done to cure this situation?

[Lisa Hand]

Is this a premium only plan?

Was there a corporate resolution done adopting the plan in 1994? The revision in 1997?

Were there significant changes in the plan in 1997 or was there simply a change in insurance companies?

[Guest m thom]

This is not a premium only plan. In addition to the medical self-insurance feature, it also provides medical expense reimbursement and dependent care reimbursement.

There were corporate resolutions both in 1994 and in 1997.

The only change in 1997 was in the insurance company providing administrative services.

[Lisa Hand]

It sounds like the 1997 plan document may not have been necessary. The only thing effective in 1997 was a new service agreement which should not have effected the plan document. Regardless as long as the 5500s have been properly filed, the whole issue should be resolved by restating and adopting the plan document with all the correct information, also make sure it is updated for all current laws. Your administrator should have made sure this was handled and should correct it at no charge. If they don't, it might be time to look at a new provider for your 125 plan with someone who specializes in them.