ERISA Questionnaire FAQs

Do groups with under 100 participants in a welfare plan have to file a 5500?

Only if the group is both: 1) Self-funded and 2) Pays claims and expenses out of a Trust If the group is self-funded and pays claims out of general assets, no 5500 filing is required.

What is the “Plan Year”?

Provide the plan year for the year the ERISA 5500 is to be filed; plan year should be the same as ERISA plan/wrap document plan year. For example, if the plan runs calendar year, the plan document would show 1/1/2023-12/31/2023. If we are filing for the current plan year the dates would be 1/1/2023-12/31/2023.

Who is the “Plan Sponsor”? 

Typically, the plan sponsor is the employer or other authorized agent to act on behalf of the employer.

How many Form 5500s do I need to file?

It is important to determine whether you have established one or more plans for Form 5500 reporting purposes. As a matter of plan design, you can offer benefits through various structures and combinations. For example, you could create: 

• One plan providing major medical benefits, dental benefits, and vision benefits, 
• Two plans with one providing major medical benefits and the other providing self-insured dental and vision benefits; or 
• Three separate plans. You must review the governing documents and actual operations to determine whether welfare benefits are being provided under a single plan or separate plans.

The fact that you have separate insurance policies for each different welfare benefit does not necessarily mean that you have separate plans. Some plan sponsors use a “wrap” document to incorporate various benefits and insurance policies into one comprehensive plan. In addition, whether a benefit arrangement is deemed to be a single plan may be different for purposes other than Form 5500 reporting. For example, special rules may apply for purposes of HIPAA, COBRA, and Internal Revenue Code compliance. If you need help determining whether you have a single welfare benefit plan for Form 5500 reporting purposes, you should consult a qualified benefits consultant or legal counsel.

When is my Form 5500 due?

The normal due date for Form 5500 is the last day of the seventh month after the close of the plan year (including short plan years). The regular filing deadline for calendar-year plans will be July 31 of the year following the plan year to which the Form 5500 relates. Extensions for two and one-half months are available. 

Saturday, Sunday, or Legal Holiday Rule. If the normal due date falls on a Saturday, Sunday, or federal holiday, the Form 5500 may be filed on the next day that is not a Saturday, Sunday, or federal holiday.

What happens if I have a short plan year?

For a plan year of less than 12 months, the Form 5500 and applicable Schedules generally must be filed by the last day of the seventh month after the short plan year ends. Short plan-year filers are identified in the first section of the Form 5500.

What is a Participant? 

The definition of “participant” for purposes of the 5500 main body is a covered participant. The number of covered employees includes former employees who are covered by COBRA, but not covered dependents or children covered by a qualified medical child support order. 

Caution: “Participants” and Schedule A’s “Persons Covered” are not the same. For the 5500 main body you will use “participants” at the beginning of the plan year. The Schedule A uses “persons covered” at the end of the plan year which would also include covered dependents and children. The Schedule A numbers should not be relied on to provide the number of participants.

What are Active Participants? 

The Form 5500 Instructions only provide guidance on who is an “active participant” for pension plan purposes, but no specific definition is provided for welfare plans. For welfare plans it is not clear how “active participant” may differ from “participant” so most simply repeat the same number for “number of participants.”

Why do you ask for the number of participants for the current plan year? 

If the plan is close to the 100 participant threshold, there might be a year that a form 5500 is not required. We would need to notify the DOL not to expect a filing in the following year. There are two codes that signal the DOL: 

• Code 4R is used to identify a large plan that became a small plan during the plan year and will not file a Form 5500 for the next plan year; and 
• Code 4S is used to identify a formerly large plan that stopped filing the Form 5500 because it became a small plan, but then became a large plan again and had to resume filing.

What is a Plan Number? 

The plan number is a three-digit number a plan sponsor assigns to a plan to differentiate between the plans that it sponsors. Welfare plans are to be numbered consecutively, starting with 501. Once a plan number is used, it should always be used in connection with that plan and should not be used for any other plan even if the first plan is later terminated. When a plan is terminated, its plan number should be retired. Together, the plan number and the plan sponsor’s EIN form a unique 12-digit number to identify the plan.

What is a Business Code? 

It is a six-digit code from a list of business codes that best describes the primary nature of the plan sponsor’s business; The predominant industry in which the active participants are employed (e.g., 484120 - General Freight Trucking, Long distance, 236110 - Residential Building Construction). 

Business codes for the plan sponsor may change from year to year; according to the DOL, the most applicable code in any given year should be used.

What is the Effective Date of Plan? 

The effective date is not necessarily the year in which a plan first files a Form 5500, as a plan that is subject to a Form 5500 reporting exemption may have been in existence before that time. It is the date that the benefits were first offered to the employees by the employer. The effective date may appear in the plan SPD.

What is my Plan Name and where do I find it?

 The formal name of the plan must contain enough information to identify your plan. The same name should not be used for any other plan, even if the first plan is terminated. 

The formal name of the plan should appear in the plan’s SPD and/or plan document.

What type of plan do I have? 

A “single employer plan” is a plan maintained by an individual employer (i.e., an individual corporation or non-corporate business entity) or by a controlled group of businesses (provided that funds contributed by each controlled group employer are available to pay benefits to employees of all employers in the controlled group). 

• A “multiemployer plan” is a plan maintained according to one or more collective bargaining agreements. The contributions to the plan and/or the benefits paid by the plan are subject to the collective bargaining process (even if the plan is not established and administered by a joint board of trustees and even if only some of the employees covered by the plan are covered by a collectively bargained unit that negotiates contributions and/ or benefits) such as those sponsored by unions representing plumbers, carpenters, electrical workers, painters, etc.
• A “multiple employer plan” is a plan to which more than one employer is required to contribute but that is neither a multiemployer plan (i.e., not collectively bargained) nor a single employer plan (including a plan maintained by a controlled group of businesses). Certain multiple employer welfare arrangements (MEWAs), including plans maintained by leasing companies or PEOs, may qualify under this definition as multiple employer plans. We do not prepare these type of plans. 
•  A DFE is an investment arrangements -- specialized trusts, for instance -- that manage money from several plans. We do not prepare these type of plans.

What should I check for employer type if I am a controlled group? 

Single employers and controlled groups with multiple EINs under common control would check “Single Employer”, the other options are for unions, MEWAs and other types of entities.

What is ASO? 

Administrative Services Only, refers to a self-Insured arrangement. 

What are General Assets? 

Employer does not segregate benefit contributions from general assets/funds held.

What is the Funding Arrangement and Plan Benefit Arrangement? 

You will check all boxes that apply to indicate the funding and benefit arrangements used during the plan year. The ‘‘funding arrangement’’ is the method for the receipt, holding, and transmittal of plan assets 

How do I request the two and one-half month extension of time to file? 

An extension of up to 2-1/2 months after the Form 5500 due date is available for employers that request an extension using Form 5558 (Application for Extension of Time to File Certain Employee Plan Returns). Form 5558 must be filed with the IRS—not with the DOL. If Form 5558 is filed on or before the normal due date of the Form 5500, the extension request will be automatically granted; no approval is necessary.

Do I need to sign the Form 5558 extension-to-file? 

No signature is required.

How is the Form 5558 sent? 

This Form must be mailed in and cannot be sent electronically. Because Form 5558 is an IRS filing, the Code’s rules provide that “the date of the United States postmark stamped on the cover in which such return, claim, statement, or other document, or payment, is mailed shall be deemed to be the date of delivery or the date of payment, as the case may be.” The Form 5558 instructions further provide that this same rule will apply to designated private delivery services (i.e., DHL, FedEx, and UPS).

What address do I use to mail the Form 5558? 

Mail the Form 5558 to the Department of Treasury, Internal Revenue Service Center, Ogden, UT 84201-0045.

What is the DFVC Program? 

The DOL’s Delinquent Filer Voluntary Compliance (DFVC) Program provides reduced civil penalties to plan administrators that have failed to file Form 5500s or have filed them late.1 Under the DFVC Program, plan administrators may correct late or unfiled Form 5500s by submitting a completed Form 5500 for the plan year(s) in question and paying the penalty amounts specified under the DFVC Program. The penalty amount generally depends on the size of the plan and the number of days the Form 5500 is late. 

Penalty Exposure Outside DFVC Program Is Very Large. The penalties under ERISA and applicable DOL regulations for Form 5500 compliance failures can potentially be very large. This is because the penalties are cumulative—for each late or unfiled Form 5500 (for each plan and for each plan year) the DOL is authorized to assess a significant per-day penalty from the due date for the Form 5500 until a completed Form 5500 is actually filed. Also, the DOL can assess penalties for delinquent Form 5500s back to the 1988 plan year.

What do I choose for Extensions/DFVC? 

Some employers are filing under special circumstances, here are the options: 

• Form 5558: Check this option if an extension was filed prior to the original 5500 due date 
• Automatic Extension: Check this option if an extension was filed for organizations taxes and an automatic 5500 extension was granted 
• FVC: Check this option if you have prior year 5500’s to file for missed years and you are participating in the DOL’s Delinquent Voluntary Filer Compliance Program