July is a busy time of year for Form 5500 filings. All plans that are subject to ERISA and meet certain participation size requirements are required to file Form 5500 seven months after the end of the plan year. For calendar year plans (and short plan years ending 12/31), the deadline for either filing or requesting a filing extension is July 31. Keep reading to determine if you need to file and to learn more about filing requirements.

Determining Filing Requirements

An employer with an unfunded health and welfare benefit plans that have 100 or more participants on the first day of the plan year will have a Form 5500 filing obligation with a filing deadline seven months after the end of the plan year. For calendar year plans, the deadline is July 31, making it a good time to be thinking about filing.

The Form 5500 is an ERISA requirement for all ERISA employers that sponsor health and welfare plans subject to ERISA that meets certain criteria. Employers that sponsor insured plans and self-insured plans (including the health care flexible spending account (FSA) and health reimbursement arrangement (HRA)) only have filing requirements if they are large plans that are unfunded with 100 or more participants on the first date of the plan year, for each respective plan. Other component benefit plans that may require filing include plans that provide major medical, dental, long-term disability, AD&D, or group term life insurance. Funded plans (plans that hold assets in a trust) must file Form 5500 regardless of the number of covered employees.

Church controlled groups and governmental entities (i.e., state, city, town, village, public school districts, etc.) are not subject to ERISA and are not required to file Form 5500 even if their plan participation exceeds 100 participants.

How do I count participants if I offer multiple benefits under a wrap plan?

Each unique employee must be counted independently as of the first day of the plan year (and would count as one participant) if they are covered by one or more plans included in the wrap document and family members are disregarded. This is different from data provided by the insurance carriers on a Schedule A data where an approximate number of covered lives is reported as of the last day of the plan year which includes a total of employees, spouses, and dependent children covered on the plan.

Example

A wrap plan includes the employer’s medical, dental, and vision plans. To determine the Form 5500 filing obligation, the employer may need to identify the number of participating employees as of the first day of the plan year from payroll or billing records. Remember: The Schedule A is not reliable for this purpose as the carrier provides the number of covered lives (employee, spouse, and children) on the last day of the plan year. Assume the counts as follows:

• Medical Plan: 88 employees (152 covered lives)
• Dental Plan: 91 employees (124 covered lives)
• Vision Plan: 89 employees (110 covered lives)

While it would seem that a 5500 would not be required as all the employee participation counts are less than 100 if you look at each coverage type separately, however you first need to consider if there are employees on just one or multiple benefits. Employees are only counted once for determining if you are required to file Form 5500. Below is an illustration of the actual enrollments. Those in the green circle are covered under the medical plan. Those in the blue circle are covered under the dental plan. Those in the orange circle are covered under the vision plan. As you see, there are various ways that the plans overlap.

The totals in each of these sections would need to be added together in order to get a total unique participant count. When all are totaled, there are 101 employees participating in at least one of the lines of coverage (3+5+4+4+76+6+3). In this case, the wrap plan participation triggers the need to file a 5500 and Schedule A information would be required for all benefits under the wrap plan.

What are the deadlines to file a Form 5500?

Here’s the deadlines for filing Form 5500 (including the deadline with an extension, provided Form 5558 was filed timely).

What happens if the employer cannot file on time?

In the event that an employer cannot complete and electronically submit Form 5500 by the deadline for their plan year, a one-time 2.5 month extension can be requested by submitting IRS Form 5558 through the U.S. Mail. The extension deadline for the 2022 calendar year plans is 7/31/2023.

If the employer fails to file the extension by the filing deadline, there is a penalty of $50 per day for late returns with no penalty maximum, unless the employer uses the Delinquent Filer Voluntary Compliance Program (DFVC). The penalty is assessed per ERISA plan number for each plan year that is late.

More information about the DFVC is available in our blog article Consequences and Remedies for Late and Missing Form 5500s.

Please see the table above for a full listing of Form 5500 filing deadlines as well as extended deadlines. (Dates in table based on plan years ending on the month-end.)

How do you file for a Form 5500 filing extension?

To complete the IRS Form 5558 for health and welfare plans, an employer must fill in the employer name, address, EIN, plan name, plan number and plan ending date, and the requested extension deadline portions of the form (see sample below). This information can be generally found in the employer’s Summary Plan Description. The extension request is for a maximum of 2.5 months and is granted automatically if the Form 5558 extension request is postmarked by the original filing deadline. If the employer is requesting an extension for the Form 5500 series, an employer signature is not required.

Although Form 5500 must be filed electronically, Form 5558 (which requests the filing extension) must be submitted via U.S. Mail or Private Delivery Service (DHL Express, Federal Express, and UPS). The mailing address for all extension requests regardless of state of organization or filing deadline is:

Department of the Treasury

Internal Revenue Service Center

Ogden, UT 84201-0045

Below is a sample, completed Form 5558 created for a calendar year plan.

What happens if you miss the extension to file deadline?

Failure to file Form 5500 by the extension deadline will result in a $50 per day penalty assessment back to the original Form 5500 deadline. For example, if you file Form 5558 and request an extension for your calendar year plan until 10/15/2023 – but you do not file your Form 5500 until 10/20/2023 – the $50 per day penalty assessment will apply back to the initial 7/31/2023 deadline date, not just the 10/15/2023 extension date. An Employer should be aware that ERISA compliance is very important and the Department of Labor (DOL) in 2023 has the authority to assess a penalty of up to $2,586 per day for failure to comply with 5500 filing obligations.

How can I get help on Form 5500 filing?

Employee Benefits Corporation can assist employers with health and welfare plan Form 5500 preparation. We will automatically prepare Form 5500’s for employers that have our flexible benefit plan if applicable and employers may request 5500 filing service for their HRA for a fee. Employers that do not use our FSA or HRA administration services or need insured plan, self-funded or wrap plan filings may separately contract with us under Compliance Services for 5500 preparations. Please contact sales@ebcflex.com for more information and pricing details.