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Sponsoring a Health & Welfare Benefit Plan: Are You 5500 Compliant?

5/17/2017 - By Judy Fryer

Many employers/plan sponsors wonder, “Do I have to file a Form 5500 for my Health and Welfare Plans?”  While most employers/plan sponsors are very familiar with filing the Form 5500 for their retirement plans, many are not as confident about the Form 5500 filing requirement for their health and welfare plans. 

Health & Welfare Plans provide benefits such as medical, dental, and life insurance. In 2002, the Form 5500 filing requirement was amended by the IRS, but many initially believed that the requirement had been fully suspended.  However, the requirement was only lifted for some employers; but, for others (those not meeting the exemptions), the requirement remained in place and continues to be an annual requirement.

So you might be asking… “Who is required to file a Health and Welfare 5500?”

Any employer that sponsors health & welfare benefit plans covered by Title I of ERISA is required to file a Form 5500 for those benefit plans. There are exemptions, including:

  • Premium Only Plans (POP) or Cafeteria Plans do not have to file a Form 5500.  

  • A health & welfare plan that has fewer than 100 participants as of the beginning of the plan year and is unfunded does not have to file a Form 5500.

There are other more detailed exemptions which require a closer review.

Due Date for Filing the Form 5500

The due date for filing the Health & Welfare Form 5500 is the last day of the 7th month after the plan year ends.  So, if you have a calendar year plan that ends on December 31st, your 5500 would be due without any extension on July 31st.  (Plans can file for a 2 month, 15 day extension by the original due date each plan year if needed; or, an automatic extension of time to file until the due date of the federal income tax return of the employer will be granted if certain conditions are met).  All Form 5500’s must be filed electronically through the EFAST2 system. 

Penalties for Not Filing the Health and Welfare 5500

ERISA and the Internal Revenue Code provide for assessment or imposition of civil penalties in cases in which there is a failure or refusal to file a complete and accurate annual return/report.

  • Penalties assessed after 1/13/2017 are $2,097 per day. 

  • Penalties assessed 8/2/2016 through 1/13/2017 are $2,063 per day. 

  • Prior to 8/2/2016, it is $1,100 per day.  

  • Penalties are cumulative and reach back as far as 1988.

  • The Maximum penalty increases annually for inflation.  

Penalties can be reduced if action is taken before notice is received from the Department of Labor (DOL). Delinquent (late) Form 5500s (multiple years) can be filed under the Delinquent Filer Voluntary Compliance Program (DFVC).

If you have further questions on this topic or others related to Health & Welfare Benefit Plans, you can contact me at judy.fryer@saltmarshcpa.com or call (850) 435-8300 x1065.

About the Author | Judy Fryer

Judy is a manager in the Retirement & Medical Plans Department of Saltmarsh, Cleaveland & Gund. She has been practicing in this field since 1982 and has significant management, medical billing, CPT and ICD9 coding experience. Judy is a Certified Section 125 Administrator through the HR certification Section 125 training program and remains compliant with HIPAA training and active membership with the Employee Benefits Institution of America (EBIA).

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