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Covering more than 100 employees? Don’t overlook Form 5500 for a welfare benefit plan.

October 18, 2017

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The Department of Labor (DOL) has targeted plan sponsors who have missed welfare benefit plan filings. They have contacted plan sponsors who file a large plan Form 5500 for a retirement plan asking if they should also be filing a Form 5500 for a welfare benefit plan.

Late filed returns are subject to penalties from both the IRS and DOL, so it’s very important to know if you should be filing. The IRS penalty for late filing of a 5500-series return is $25 per day, up to a maximum of $15,000 and the DOL penalty for late filing can run up to $1,100 per day, with no maximum.

Most employers are keenly aware of the Form 5500 filing requirements for retirement plans:

  • Sole proprietors file a Form 5500EZ
  • Small plans file a Form 5500-SF (plans with less than 100 plan participants)
  • Large plans file a Form 5500 with audited financial statements (plans with more than 100 plan participants).

Unfortunately, most employers are much less familiar with the Form 5500 filing requirements for welfare benefit plans. Welfare benefit plans can include any of the following benefits:

  • Health coverage
  • Life insurance
  • Dental coverage
  • Vision coverage
  • Short-term disability coverage
  • Long-term disability coverage
  • Employee Assistance Program

A Form 5500 filing is required for any welfare benefit plan covering more than 100 employees as of the first day of the plan year. The filing requirement exists regardless of plan structure:

  • Fully insured
  • Fully self-insured
  • Partially insured and partially self-insured

Unlike retirement plans, welfare benefit plans generally do not have a small plan filing requirement (i.e., for plans with less than 100 plan participants). Consequently, it is very common for the welfare benefit plan filing requirement to be missed by growing companies when they exceed the 100 plan participant limit.

Let us help you determine if you have a welfare benefit plan filing requirement before you hear from the DOL! Bill Edwards from our Qualified Plan Administration and Consulting group can review all of your benefit offerings and determine if you have any unmet filing requirements. Bill can be reached at [email protected] or 513-424-7980.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

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