Benefits Buzz

Form 5500 Filing Requirements May Extend to Small Employers

Posted on August 3rd, 2016

According to a DOL website, “The Form 5500 Series is an important compliance, research, and disclosure tool for the Department of Labor, a disclosure document for plan participants and beneficiaries, and a source of information and data for use by other Federal agencies, Congress, and the private sector in assessing employee benefit, tax, and economic trends and policies. The Form 5500 Series is part of ERISA's overall reporting and disclosure framework, which is intended to assure that employee benefit plans are operated and managed in accordance with certain prescribed standards and that participants and beneficiaries, as well as regulators, are provided or have access to sufficient information to protect the rights and benefits of participants and beneficiaries under employee benefit plans.”  
Long story short, employers are required to report and disclose certain information about their benefit plans using Form 5500. However, smaller employers have been given a pass from the filing requirement. The exemption generally applies to employers with plans that cover fewer than 100 participants and the plan is fully insured, unfunded or a combination of both…..but that may be changing. 
The Department of Labor (DOL), Internal Revenue Service (IRS) and Pension Benefits Guaranty Corporation (PBGC), sometimes referred to as the “Agencies,” jointly proposed regulations which would eliminate the small plan exemption. If finalized, the change is expected to take effect for 2019 plan year filings. 
Additionally, employers would be required to provide very comprehensive information about their group health plan, including things such as:
  • Participant and employer contributions
  • If the plan is fully insured, uses a trust or pays claims from the general assets of the employer
  • Information about COBRA coverage
  • Whether the plan is grandfathered
  • Details about whether the plan is an FSA or HRA
  • Compliance with certain plan document distribution requirements
  • Financial and claims information
  • Listing of third-party administrators
  • Several others
Public comments on the proposed changes can be made up until October 4, 2016. A summary of the proposed changes can be found here
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The materials contained within this communication are provided for informational purposes only and do not constitute legal or tax advice. 

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