Certain employers must submit a Internal Revenue Service (IRS) Health and Welfare Form 5500 (“Form 5500”) to annually report certain information on their employee benefit plans to the Department of Labor. Employers with calendar year plans who received a filing extension must submit their Form 5500 by October 15th.
Compliance Snapshot:
- Employers who sponsor health plans with more than 100 participants on the first day of the plan are required to file a Health and Welfare Form 5500;
- The Form 5500 is due the last day of the 7th month after the end of the plan year (for employers with calendar year plans, the Form 5500 is due July 31st, or October 15th with an extension).
FAQs:
Which employers must file a Form 5500?
Employers who sponsor plans that cover 100+ plan participants on the first day of the plan year and plans that pay benefits from a trust (no matter how many participants are enrolled) must file a Form 5500.
It is important to note that plans that are “wrapped” in a wrap document must be included in the Form 5500 filing, even if only one plan has 100+ participants. This means that if the employer has a wrap document that includes their medical, dental and vision plans, they must report on all plans in Form 5500 if any one of their medical, dental or vision plans have more than 100 participants on the first day of the plan year.
Who are plan participants?
Participants are employees that are enrolled in the plan, which includes former employees who are receiving COBRA group health continuation coverage benefits. Covered dependents are not counted as participants.
When is the Form 5500 due?
The deadline for filing Form 5500 is the last day of the seventh month after the plan year ends. For calendar year plans, the deadline is July 31st; however, if an extension request is filed prior to the original due date, the deadline may be extended an additional two and a half months. As such, the deadline for a calendar year plan would be October 15th for employers that have received a filing extension.
Is there a penalty for filing the Form 5500 late?
Employers may face a $10 per day penalty for each day past the filing deadline, up to a maximum of $2,000 per filing.
Are there any retention requirements?
Employers should be sure to keep a signed copy of the original Form 5500 filing on file for at least 6 years from the date of filing.
Employer Responsibility:
Employers should always be sure to review the Form 5500 carefully before filing. The Form is signed under penalty of perjury by the plan sponsor (i.e.the employer). Employers are ultimately responsible for the Form 5500 filing and its contents, even if a draft is prepared by a third party administrator (TPA), broker, or other vendor.
For Sequoia clients only:
- Sequoia requests a filing extension every year to ensure there is sufficient time to gather documents from the carriers. As such, the Form 5500 filing deadline for Sequoia clients with a calendar year plan will be October 15th.
- Sequoia works with an outside CPA firm to prepare Form 5500 for employers to review. It is extremely important that employers review the Form 5500 with their preferred counsel before filing.
The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.
