- Our Team
July 12, 2019
Employee health and welfare benefit plans are established to provide medical, sickness, accident, disability, and many other benefits to employees or former employees and their dependents and beneficiaries. Plans with more than 100 participants on the first day of the plan year must file Form 5500 each year whether funded or unfunded.
A funded plan receives contributions from active or former employees and/or uses a trust to hold plan assets or act as a conduit for the transfer of plan assets. Conversely, an unfunded plan has its benefits paid as needed directly from the general assets of the employer rather than a separate trust account.
It’s important to know these differences when it comes to understanding when a Form 5500 needs to be filed. In fact, most insurance companies will provide a Form 5500, Schedule A, but fall short of preparing the full Form 5500. Failure to do so can result in penalties of $1,100 per day from the date the filing was due until it is paid.
Considering the penalties could add up, we wanted to walk you through a complete understanding to make sure your company had the facts.
First, who is considered a participant when understanding if a Form 5500 is required?
The Department of Labor considers the following groups to be counted as participants when contributing to whether or not your company needs to file:
Second, which plans are considered exempt from any filing requirements?
Typically, forms need to be filed, except for the following:
As shown, it can be a bit confusing trying to decide if your health and welfare plan needs to file a Form 5500. We can help! Let us cut through the tax laws and provide you with a clear answer. And if you do need to file, we can prepare the filing for you.
Whether you need to file a Form 5500 for your health and welfare plan or if you need to file a Form 5500 for your retirement plan, we can provide timely service and the answers you need while being cost effective. And, if you are looking to consult on what type of retirement plan is best for you, we would be glad to discuss your needs and what type of plan and plan provisions would best serve your needs. For more information, contact us at email@example.com.
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