As the end of July approaches, it’s important for plan sponsors to be aware of the upcoming Form 5500 filing deadline. If you manage a fully-funded health plan with 100 or more employees or any self-insured health plan, this is a crucial compliance requirement. In this blog, we’ll provide an overview of Form 5500, who needs to file, and how to ensure you meet the filing requirements by the deadline.
What is Form 5500?
Form 5500 is an annual report required by the Department of Labor (DOL) and the Internal Revenue Service (IRS). It is designed to ensure that employee benefit plans comply with the Employee Retirement Income Security Act (ERISA) regulations. The form provides detailed information about a plan’s financial condition, investments, and operations. Filing Form 5500 is essential for maintaining transparency and accountability in the management of employee benefit plans.
Key Information Included in Form 5500
- Financial Condition: The form provides a snapshot of the plan’s financial status, including assets, liabilities, income, and expenses.
- Investments: Details about the plan’s investment portfolio, including types of investments and their performance.
- Operations: Information on plan participants, contributions, distributions, and any compliance issues or plan changes.
Who Needs to File Form 5500?
Form 5500 must be filed by the Plan Sponsor, typically the employer or organization that establishes and maintains the benefit plan. Specific filing requirements include:
- Fully-Funded Health Plans: Any health plan that is fully funded and covers 100 or more employees at the beginning of the plan year.
- Self-Insured Health Plans: All self-insured health plans, regardless of the number of participants.
Filing Deadlines
For plans operating on a calendar year basis, Form 5500 must be filed by the last day of the seventh calendar month after the end of the plan year, which for 2023 plans is July 31, 2024. If a plan needs more time to file, an extension can be requested, extending the deadline to October 15, 2024. It’s crucial to file on time to avoid penalties.
How to File Form 5500
Form 5500 must be submitted electronically through the Department of Labor’s EFAST2 system. Here’s how to ensure a smooth filing process:
- Prepare Your Information: Gather all necessary information about the plan’s financial condition, investments, and operations. Ensure all data is accurate and up-to-date.
- Use the EFAST2 System: Log in to the EFAST2 system to complete and submit Form 5500. The system guides you through the process and allows you to attach required schedules and documents.
- Review and Submit: Before submitting, review all entries for accuracy. Ensure all required fields are completed, and supporting documents are attached.
Helpful Links
- Department of Labor Form 5500 Filing Portal: EFAST2 Filing.
- Form 5500 Instructions: Instructions for Form 5500.
Why Timely Filing is Important
Failing to file Form 5500 on time can result in significant penalties. The Department of Labor can impose fines of up to $2,586 per day for late filings. Additionally, non-compliance can trigger audits and further scrutiny of the plan’s operations, which can be costly and time-consuming.
Conclusion
Meeting the Form 5500 filing deadline is a critical responsibility for plan sponsors. By ensuring timely and accurate filings, you not only comply with federal regulations but also demonstrate a commitment to transparency and proper management of employee benefit plans. Make sure to mark your calendar for July 31, 2024, and take the necessary steps to complete your Form 5500 filing on time.
