DOL Issues Employer Notices on Welfare Benefit Plan (Form 5500) Filings– April 23, 2013

As part of the Department of Labor’s (DOL) enhanced enforcement initiative for welfare benefit plans, the DOL has issued notices to employers that may be required to file Form 5500 (“Annual Returns/Reports of Employee Benefit Plan”). The notices are dated April 18, 2013, and require a response in 15 days — by May 3rd.

Both the IRS and the DOL may impose penalties if Form 5500 is not timely filed:

  1. IRS: $25/day up to $15,000/plan/year
  2. DOL: $300/day up to $30,000/plan/year

Welfare benefit plans generally are required to file if more than 100 employees are enrolled in benefits (e.g., health, life, dental, disability, etc.) as of the first day of the plan year. It is important to note that although there generally is a third party administrator (TPA) who files Form 5500 for a company’s retirement plans, there generally is not a TPA involved with welfare benefit plans. Therefore, unless you are filing Form 5500 on your own behalf, it is very likely that it is not being filed.

Although employers generally are not permitted to participate in the Delinquent Filer Voluntary Compliance program once they have been contacted by the DOL, the April 18, 2013, notice does permit employers to participate. Under the program, employers can file a late return and pay substantially reduced DOL penalties of generally $2,000 per year, per plan, not to exceed $4,000 per plan.

If you have received a notice, it is imperative that you respond promptly to the DOL and indicate your desire to participate in the Delinquent Filer program, if appropriate. A failure to respond in a timely manner may result in the imposition of the $15,000/$30,000 per plan, per year penalties detailed above.

If your organization has more than 100 employees enrolled in benefits or if you have received a notice from the DOL, please contact a member of your Cohen & Company service team immediately to discuss.


This communication is for information only, and any action should only be taken after a detailed review of the specific situation and appropriate consultation.

Notwithstanding that these materials do not constitute legal, accounting or other professional advice, as may be required by United States Treasury Regulations and IRS Circular 230, you should be advised that these materials are not intended or written to be used, and cannot be used by you or any other person, for the purpose of avoiding penalties that may be imposed under federal tax laws. No written statement contained in these materials may be used by any person to support the promotion or marketing of or to recommend any federal tax transaction(s) or matter(s) addressed in these materials, and any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor with respect to any such federal tax transaction matter.