Who Has to File a 5500 for Health Insurance?

Form 5500 is an annual report required by the Employee Retirement Income Security Act of 1974 (ERISA) for most employee benefit plans. It provides government agencies like the Department of Labor (DOL) and the Internal Revenue Service (IRS) with essential information about a plan’s financial health, operations, and compliance. This discussion focuses on Form 5500’s application to health and welfare benefit plans, ensuring transparency and accountability in their administration.

Understanding Form 5500 for Health Plans

ERISA establishes minimum standards for most private industry health and pension plans to protect participants. Form 5500 gathers information about employee welfare benefit plans, which provide benefits other than retirement income.

Welfare benefit plans include medical, surgical, hospital, dental, vision, and prescription drug coverage. They also cover benefits for sickness, accident, disability, or death, such as short-term and long-term disability, group life insurance, and accidental death and dismemberment. Health reimbursement arrangements (HRAs) and health flexible spending accounts (FSAs) are also welfare benefit plans. These benefits generally fall under ERISA’s purview, whether self-funded or fully insured.

Determining Your Filing Obligation

A plan’s filing obligation for Form 5500 depends on the number of participants. Plans typically need to file if they cover 100 or more participants at the beginning of the plan year. This threshold distinguishes between “large plans” and “small plans,” with large plans usually facing more extensive reporting requirements.

For welfare benefit plans, a “participant” includes current employees enrolled in the plan and former employees receiving benefits like COBRA or retiree medical coverage. It also includes former employees eligible to elect COBRA coverage. Dependents are not counted as participants.

Several common exemptions can relieve a plan from the Form 5500 filing requirement. Small welfare benefit plans, with fewer than 100 participants at the beginning of the plan year, are exempt if they are unfunded, fully insured, or a combination. An unfunded plan pays benefits directly from the employer’s general assets, while a fully insured plan provides benefits exclusively through insurance policies. If a small plan uses a trust or separate fund to pay benefits, it is generally considered funded and may still be required to file.

Governmental plans, established by governmental entities, are exempt from ERISA and Form 5500 filing requirements. Church plans, maintained by churches or associations of churches, are also exempt. “Top hat” plans, unfunded plans for a select group of management or highly compensated employees, are generally exempt from most ERISA provisions, including annual reporting.

The plan administrator, typically the employer sponsoring the plan, is legally responsible for filing Form 5500. They must ensure the form is filed accurately and on time, even if preparation is delegated. Failure to comply can result in significant penalties from the Department of Labor and the IRS, potentially reaching thousands of dollars per day.

Information Required for Filing

Preparing Form 5500 requires gathering specific information and documentation for the reporting year. This includes plan identification details like the official name, Employer Identification Number (EIN), and information about the plan sponsor and administrator. The participant count at both the beginning and end of the plan year is also required.

Self-funded plans need comprehensive financial information, including details on plan assets, liabilities, income, and expenses. Insured plans must provide information about their insurance carriers, premiums paid, and total claims paid. This data is reported on Schedule A (Insurance Information), which must be attached to Form 5500 if benefits are provided by an insurance company. Schedule A details commissions and fees paid to agents or brokers.

Information regarding service providers and their compensation from the plan is reported on Schedule C (Service Provider Information). This schedule must be attached if a service provider received $5,000 or more in direct or indirect compensation from the plan during the year. For funded plans, Schedule H (Financial Information) or Schedule I (Financial Information—Small Plan) may be required, depending on plan size. Accurate record-keeping throughout the plan year is crucial for compiling this detailed information.

Submitting Your Form 5500

Once compiled, Form 5500 and its applicable schedules must be filed electronically through the ERISA Filing Acceptance System 2 (EFAST2). This system, developed jointly by the DOL, IRS, and Pension Benefit Guaranty Corporation (PBGC), streamlines the submission and processing of these annual reports. Filers can use EFAST2-approved vendor software or the DOL’s IFILE website to prepare and submit the form.

The standard filing deadline for Form 5500 is the last day of the seventh month following the end of the plan year. For calendar year plans, the due date is typically July 31 of the following year. An extension can be requested by filing Form 5558 (Application for Extension of Time to File Certain Employee Plan Returns) with the IRS. Filing Form 5558 by the original due date automatically grants a 2.5-month extension, typically pushing the deadline to October 15 for calendar year plans. As of January 1, 2025, Form 5558 can be filed electronically through EFAST2 or on paper.

After submission through EFAST2, filers receive a confirmation of receipt. Retain a copy of the filed Form 5500, including any required electronic signatures. Form 5500 is a public document and becomes available on the Department of Labor’s website once successfully filed.