Welfare benefit plans provide employee benefits such as medical, dental, life insurance, apprenticeship and training, scholarship funds, severance pay, vision and disability.

Which welfare plans must file a form 5500?

Welfare benefit plans covered by ERISA are required to file Form 5500 unless specifically exempt (see below).

A Welfare benefit plan that is “unfunded” or “fully insured” or a combination of the two and covers 100 or more participants at the beginning of the plan year must file Form 5500 and required schedules. Form 5500 is due seven months after the end of the plan year, but may be extended an additional 2½ months.

A Welfare benefit plan is exempt from filing Form 5500 if it covers fewer than 100 participants as of the beginning of the plan year and it is unfunded, fully insured, or a combination of the two.

A Welfare benefit plan that is funded or uses a trust must file Form 5500 regardless of participant count. A Health FSA reimbursement plan that pays benefits directly from the Employer’s general assets or from a trust account must file Form 5500.

What about cafeteria plans?

IRS Notice 2002-24 suspended the Schedule F & Form 5500 filing requirement under Code Section 6039D for Cafeteria Plans established under Code Sections 125, 127, and/or 137. The IRS Notice did NOT suspend the Form 5500 filing requirement and required schedules for Welfare Benefit Plans subject to ERISA.  Welfare Benefit Plans that are associated with fringe benefit cafeteria plans must file Form 5500.

What are the penalties for not filing form 5500?

• ERISA Section 502(c)(2) provides for a penalty of up to $1,100.00 per day with no maximum for a plan administrator who fails or refuses to file a complete report. 
• Internal Revenue Code Section 6652(e) provides for a penalty of $25.00 per day (up to $15,000.00 per year) for not filing returns by the due date.

What is the D.F.V.C. program?

The U.S. Department of Labor established the Delinquent Filer Voluntary Compliance Program in order to encourage delinquent plan administrators to comply with ERISA’s annual reporting requirements. Large plan sponsors (with 100 or more participants) can pay a $2,000.00 per-year fine and the DOL will waive its routine penalties if all late returns are filed at the same time. The fine is capped at $4,000.00 per-plan regardless of the number of late annual reports filed in one submission. Small plan sponsors with less than 100 participants can pay a fine of $750.00 per-year (capped at $1,500.00 per-plan). The IRS has consented to waive its penalties concurrent with a valid D.F.V.C. Program submission.

• Many plan administrators are unaware they must file a form 5500 for their Welfare Benefit Plan.

• DO NOT get caught off guard and out of compliance.

• DO NOT subject your organization to Internal Revenue Service and Department of Labor penalties.

Our Services

Hembree TPA, Inc. can help bring your Welfare Benefit Plan into compliance. We prepare Form 5500 and all required schedules:

•  Schedule A

•  Schedule C

•  Schedule D

•  Schedule G

•  Schedule H (for large plans if the Plan is “funded” or uses a “trust”) *

          * A separate independent auditor fee may be required

•  Schedule I (for small plans if the Plan is “funded” or uses a “trust”)

•  Consulting for D.F.V.C. Program assistance

Please call Hembree TPA, Inc. at (888) 486-401k or e-mail us at info@hembreetpa.com with questions about a new or existing Welfare Benefit Plan's Form 5500 filing requirement.

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