Business and Management

What Is Form 5500 About?

Under the Employee Retirement Income Security Act of 1974 (ERISA), Form 5500 must be filed annually for employer-sponsored welfare plans with 100 or more participants beginning with the beginning of the plan year. For the purpose of counting participants, you must include eligible employees, retirees and primary COBRA beneficiaries. However, dependents are not included.

The following wellness plans are available: medical, vision, life and accident benefit plans. The Schedule A must include information about the insurance policy if the plan provides group coverage. Discover more about form 5500 preparation services through online sites.

Unfunded welfare plans mean that most benefits are paid via group insurance contracts or directly from the employer's general assets. If the plan covers group insurance, the presentation will only consist of the three-page Form 5500 or the Form 5500 with one or several Schedules A.

However, Form 5500 may be required if the plan is funded (e.g., a benefits trust or part of a multiple employer welfare arrangement (MEWA). This applies regardless of the number of participants. You may need to work additional hours. Funded plans or MEWAs are uncommon and outside the scope of this article.

These plans are exempt from ERISA. Form 5500 is therefore not applicable:

  • Government employers sponsor plans and some church plans sponsor plans
  • Most voluntary plans (for instance, after-tax plans that cover all employees and don't require any employer sponsorship, sponsorship or contribution) are voluntary.
  • Payroll practices, such as unfunded vacations or sick pay;
  • Plans are maintained to comply only with state workers' compensation, unemployment insurance laws, and weekly disability insurance laws.

Flora Wilson