Welfare Plan Filings

Each year, we receive many questions regarding the Form 5500 filing requirements for welfare benefit plans that are covered by ERISA. Welfare benefit plans are benefit plans established and maintained by an employer which commonly include some or all of the following benefits: medical, dental, vision, disability, and life insurance benefits. Unless the plan is exempt, the Plan Administrator must report certain welfare benefit plan information to the DOL annually on Form 5500.

It is essential the employer understand whether annual reporting is required, which benefits are included in the welfare plan, and how many employees are covered.

In general, unfunded and/or insured welfare plans are exempt from filing Form 5500 in each year they are considered small plans; i.e., when they cover fewer than 100 participants on the first day of the plan year. An example of an “unfunded” plan is one that is not insured, and that pays benefits from the employer’s general assets. “Insured” plans utilize insurance contracts to pay benefits.

On the other hand, small plans that are considered “funded” are never exempt from filing Form 5500. An example of a “funded” plan is one that pays benefits from a trust that is segregated from the employer’s general assets. Welfare plans that are considered "funded" for at least part of the year are required to undergo a plan audit. 

Insurance carriers usually provide information for preparing Schedule A and Schedule C of the Form 5500 within a few months after the end of the reporting period for the contract. This information should be saved for the preparer as it is essential to preparing the Form 5500.

The 5500 is required to be filed electronically using EFAST2. The due date for filing is seven months after the plan’s year-end; although this due date may be extended 2 ½ months by filing Form 5558.

Employers that discover they have failed to file in years that they should have done so may use the Employee Benefit Security Administration’s Delinquent Filer Voluntary Compliance Program (DFVCP). This program is only available if the employer has not been notified in writing by the DOL of a failure to file a timely annual report. Reduced civil penalties apply if the employer is able to use the DFVCP to correct for the late filings. Otherwise, the penalties may be steep. The DOL may assess up to $50 per day, with no dollar limit, for the period the filing was late; and for failure to file, may assess up to $300 per day (up to $30,000 per year).