Potential Upcoming Form 5500 revisions to be aware of

By Damian Ziemianek, ACA Compliance Analyst

The proposed revisions would affect both retirement plans and health plans as the agencies look to modernize the statements and information filed about employee benefit plans. The goal for the revisions is to improve compliance under ERISA and the IRS Code. This improved compliance can be achieved through new questions relating to plan operations and the financial management of the plan. The inclusion of these compliance questions will encourage plans to evaluate whether they meet the group health plan requirements of ERISA, thereby potentially increasing the voluntary compliance by ERISA plans.

The Department of Labor (DOL), the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC) released proposed revisions to the Form 5500 required for certain ERISA-covered employee benefit plans in 2016. Since then, news about those changes have been hard to come by as they have been relatively quiet on the topic. It’s time to start planning for those changes since this could include sweeping compliance updates for health plans beginning with the 2019 plan year.

Potential questions include:

• What is the approximate number of participants and beneficiaries covered under the plan?
• To how many people do you offer the plan and how many receive COBRA benefits?
• Does the plan offer coverage for employees, families, and/or retirees?
• What type of group health benefits does the plan offer?
• Can you provide the funding information?
• Can you provide detailed claims information including claim denials?

These proposed regulations will not only impact those employers who are currently required to file, but it will also impact the small plans – those with less than 100 participants – that currently are not required to file Form 5500. If the proposition is upheld, it may eliminate the exempt status for small, fully insured and self-funded group health plans. These plans will have to file a limited Form 5500 and Schedule J beginning with the 2019 plan year.  Specifically, these plans would require that Line 1-5 be completed on the Form 5500 and Lines 1-8 on Schedule J as well. It seems that at least part of the reason for these new requirements is to help the agencies identify which small plans to audit and therefore look out for those that may be affected by non compliant provisions. The bottom line is that the time is now, for companies that sponsor such health plans, to begin compliance auditing on their health plans and prepare for the expected revisions to the Form 5500.