- Posted by Jessica Waltman
- On June 14, 2019
If your company’s ERISA health and welfare plan has 100 or more participating employees and began its annual plan year on January 1, in all likelihood, you have a critical compliance deadline coming up and must file Form 5500 with the federal government by July 31, 2019.
Form 5500 is an annual report that provides details about a company’s employee benefit plan that must be submitted to the federal Department of Labor (DOL) and Internal Revenue Service (IRS) annually. The Form 5500 filing requirement applies to most group health and welfare plans that cover more than 100 employees in a plan year. This requirement applies to all types of group health plans – self-funded coverage, level-funded plans and businesses who purchase fully-insured coverage from a health insurance carrier. While many organizations use a vendor to do their Form 5500 filing for them, ultimately it is the employer’s responsibility to make sure the reporting gets done correctly and on time. The only large group health plan sponsors that do not have to worry about Form 5500 filings are governmental plans and church plans.
Forms 5500 must be filed every year by the last day of the seventh month after the group health plan year ends, so the deadline is July 31, 2019, for a calendar-year plan that ended on December 31, 2018. For companies whose group health plans renew at a different time during the year, the Form 5500 deadline will vary according to that last day of the seventh-month schedule.
If you are not sure if the Form 5500 requirement applies to your company’s group health plan, then perform a complete count of covered employees to decide. Many companies need to file a Form 5500 for their group retirement plan too, and the applicability requirements are different for the two types of plans. To determine if your business needs to file a Form 5500 report about its health and welfare benefit plan components, count every employee covered by the plan on the first day of the plan year. Full-time and part-time employees count as one person each as long as they were covered on the first day of the plan year; if an employee joined the plan later in the year, then they do not count towards your total number of participants. If the number of employee participants enrolled in the plan on the first day it started for 2019 was 100 or higher, then your group health and welfare benefit plan should file a Form 5500 report before the annual deadline specific to your plan.
The amount of information an organization will need to report and the number of Forms 5500 it must file varies based on the structure and design of the group employee benefit arrangement. For example, your company will likely have separate Form 5500 requirements for its retirement plan or other plan components, and you may need to include additional information on the form if your plan is self-funded. If your company has elected to wrap its various employee benefit offerings together into one comprehensive plan document, then only one Form 5500 must be filed, but if different benefit components have separate plan documents, then multiple forms may need to be completed.
A plan’s Form 5500 report must be filed electronically either through a qualified service provider or the federal EFAST2 online portal. Employers that fail to file their Forms 5500 and those that submit late are subject to penalties from both the DOL and IRS. These penalty amounts can range in the thousands of dollars per day for each day the plan is in violation, so it is crucial to stay on top of Form 5500 filing requirements. If you feel like you are running out of time, employers can request an automatic 2½-month extension using Form 5558.
If you need assistance with your Form 5500 filing, please contact your Kistler Tiffany Benefits’ Employee Benefits Consultant.