The Foggy Future of Form 5500 Filings Bad News, Made Just a Bit Better With the Help of A Few Cute Cats. By Benjamin Davis

Let’s begin with a bit of history

So the next obvious question is… Just what are Form 5500s? The Form 5500 was created under the Internal Revenue Code and ERISA to collect information about employee benefit plans, including health, dental, vision, long term disability, short term disability, Life, Accidental Death & Dismemberment… The Form 5500 is the DOL’s primary source of information about the operations and funding of employment-based welfare benefit plans. So the next obvious question is…

is this thing for, anyways? What, EXACTLY, is this thing for, anyways?

What is the Form 5500 filing? The Form 5500 is: An compliance and research tool for the DOL A disclosure document for plan participants A source of information and data for use by others (Federal agencies, Congress, and the private sector) in assessing employee benefit, tax, and economic trends and policies.

What are Form 5500s used for? The Form 5500 is part of ERISA's overall reporting and disclosure framework, which is intended to assure 2 things: 1. Employee benefit plans are operated and managed in accordance with certain standards 2. That participants, beneficiaries, and regulators have access to sufficient information to protect their rights under employee benefit plans.

IMPORTANT The following proposal was announced under the Obama administration. We currently have no indication of what the Trump administration will do. We do not if the proposed revisions will be implemented as is, modified before implementation, or done away with entirely.

First, the bad news Phyllis C. Borzi, Assistant Secretary for the EBSA, said “The 5500 is in serious need of updates to continue to keep pace with changing conditions in the employee benefit plan and financial market sectors. We must also remedy the form’s current gaps in collecting data from ERISA group health plans.” Since the Affordable Care Act includes reporting requirements for group health plans subject to ERISA, a Proposed Rule (by the Employee Benefits Security Administration, the Internal Revenue Service, and the Pension Benefit Guaranty Corporation) was submitted to the Federal Register on 07/21/2016. If adopted on schedule, the revised reporting requirements would generally apply to plan years beginning on or after January 1, 2019.

Proposed Changes – Schedule J If the proposed revisions to the Form 5500 are accepted, Schedule J will be a new addition to the Form 5500 Schedules for group health plans. The amount of information requested is staggering. Schedule J will have to be filed by all health & welfare plans. The filing exemption (for plans with less than 100 participants on the first day of the plan) goes away.

What information is being requested on the Schedule J? Who does the plan offers health coverage to? Employees, spouse, children, retirees, retirees only What are the benefit(s) and design characteristics ? Medical, mental health, substance abuse, pharmacy or prescription drugs, wellness, preventive care, emergency services, pregnancy benefits, vision, dental, and more. How does the funding work? Employer contributions; participant contributions; benefits paid from general assets and associated amounts.

What information is being requested on the Schedule J? What are the benefit package options? Grandfathered status, high deductible health plan, HRA, FSA What are your COBRA offerings? How many people were offered COBRA? How many elected COBRA? Did the plan receive any rebates, reimbursements or refunds other than those reported on Schedule A? (If you answer yes to this question, there is another question that asks who provided the refund and what you did with it.)

What information is being requested on the Schedule J? Questions regarding delinquent contributions Part II – relates to service provider and stop loss insurance information Part III – relates to financial information and requests information regarding contributions received Now that we’re finally done with this, let’s get to the good news.

What information is being requested on the Schedule J? JUST KIDDING There’s a lot more information required to complete the Schedule J

What information is being requested on the Schedule J? Part IV – Health benefit claims processing and payment information includes questions on: The number of pre and post-service claims submitted The number of such claims paid and denied The number of claims appealed How many appeals were upheld Were the appeals adjudicated during the required time frame.

What information is being requested on the Schedule J? Part V – this section includes questions regarding: Summaries of Benefit and Coverage (SBCs) Summary Plan Descriptions (SPDs) Whether the plan is in compliance with key regulatory requirements such as GINA, Michelle’s Law, Mental Health Parity, Affordable Care Act This is how excited I am, about all of the extra work I’m going to have to do because of this. Thanks, DOL.

Now, More bad News REALLY??

H.R. 3236 has lengthened the 5500 extension period On 8/7/15, H.R. 3236 (The Surface Transportation and Veterans Health Care Choice Improvement Act) was signed into law by President Obama. Part of this law altered the deadlines associated with the Form 5500 extension. Starting for plans beginning on or after 1/1/16 the extension available for filing Forms 5500s has been lengthened from 2½ months to 3½ months. Congress then repealed the bill which extended the 5500 extension period. Since this increased extension period has now been repealed, it will will remain at 2 ½ months.

Is there ANY good news? PLEASE??

We currently do not know what is going to happen! All of the preceding changes were proposed by the Obama Administration. President Trump has spent much of his time in office undoing the initiatives undertaken by his predecessor. As Trump has made repealing and replacing the ACA a centerpiece of his Presidency, it is possible he’ll do away with these changes – as they were proposed in order to help the Form 5500 meet some of the ACA requirements. We currently do not know what is going to happen!

The Future of Form 5500 Filings is Foggy You can count on Diversified Administration, Inc. to stay on top of this, and all other benefits related changes. If anything happens regarding the Form 5500 changes between now and 2019, we will be one of the first to know.