The potential requirement to annually file Form 5500 is one that’s not always top of mind for many businesses. The form is required by the Department of Labor (DOL) and IRS and details financial conditions, investments and operations of benefit plans. If you have more than 100 employees who participate in your health and welfare, or “fringe,” benefit plans, you are required to file annually.
Lately, we have seen increased audit activity by the DOL and IRS surrounding this filing. The DOL references 5500 forms filed for retirement plans with more than 100 participants and subsequently checks for a health and welfare 5500 filing from the same plan sponsor. If one is not present, the plan sponsor likely will receive a notice in the mail that the filing may be missing, which could lead to further action by the DOL. It’s important to note that the Form 5500 filing requirement is completely separate from the requirements of the ACA. So, even if you do not meet the threshold for ACA reporting, you may still have to file a Form 5500.
Plan sponsors generally must file their Form 5500 return on the last day of the seventh month after their plan year ends, which is July 31 for plan years ending December 31. 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 health and welfare benefit plans. So, unless you are filing Form 5500 on your own behalf or have communicated with your accountants, it is likely the form is not being filed.
To meet the filing deadline, now is the time to contact your accounting team with the key information below.
If you have filed Form 5500 for 2015 or prior years:
Talk with your advisors to discuss which benefits you offer through which insurance carriers, how many people participate in that benefit and if there have been any changes from prior years.
Soon you should be receiving information from your insurance company in the form of a Schedule A for each benefit offered. Forward copies of any Schedule As well as a copy of your wrap document, if you have one, to your service team as soon as possible.
If you have not filed Form 5500 for 2015 or prior years:
Do you offer health and welfare benefits to your employees? If so, do you have more than 100 employees who participate? If the answers to both of these questions are “yes,” contact your service team and provide them with the information in the section above. Also inquire as to whether you may qualify for any voluntary compliance programs to minimize penalties from failing to file in previous years.
Cohen & Company is not rendering legal, accounting or other professional advice. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts and circumstances.