Amwins Connect - May 2024 Question of the Month

Amwins Connect – May 2024 Question of the Month

Question

Do I need to file a Form 5500?

Answer

A Form 5500 filing is required for each employee welfare benefit plan sponsored by an employer that is subject to the Employee Retirement Income Security Act (ERISA). Each separate ERISA plan with 100 or more participants enrolled at the beginning of the plan year is required to file a Form 5500. Examples of common employee welfare benefit plans subject to ERISA include:

Medical, surgical, or hospital care or benefits;

Benefits in the event of sickness, accident, disability, or death.

Some benefits, such as formal scholarship plans or severance plans, may also be ERISA plans and thus subject to filing. Such plans will require a review based on all the facts and circumstances of how the plan is maintained and administered to determine if ERISA will apply.

Small plan exemption

A plan with less than 100 participants (covered employees) on the first day of the plan year will qualify for the “small” plan exemption and will not be required to file a Form 5500. If benefits are “funded,” then this “small” plan exemption does not apply, and a Form 5500 filing will be required regardless of the number of covered employees. Often, a self-insured plan is referred to as “self-funded,” however, this does not mean that the plan is actually “funded.” A “funded” plan means that the funds are segregated from the employer’s general assets such as with a trust. Most fully insured and self-insured plans are paid for from the general assets of the employer and are not considered to be “funded.”

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