Flexible Benefits Training

Transcription

1 Flexible Benefits Training Form 5500 Electronic Filing IRS Form 5500 Until April 2002, Cafeteria Plans were required to file Form 5500 Notice suspended the filing requirement for fringe benefit plans A Cafeteria Plan is a fringe benefit plan The dependent care and adoption benefit is a fringe benefit plan and does not require a filing Health FSA and HRA are welfare benefit plans and generally must file Form 5500 under ERISA Form Adoption Assistance 223 Health Savings Account (HSA) Section 125 Cafeteria Plan 129 Dependent Care Assistance 105 & 106 Health, Vision & Dental Plans 105 Unreimbursed Medical 79 Group Term Life Insurance 1

2 Form Overview Who must file? All welfare benefit plans with 100 or more participants at the beginning of the plan year that are unfunded and/or fully insured. A participant is an employee who is enrolled in the HRA or Health FSA. Unfunded means that the benefits from the plan are paid directly from the general assets of the employer. Funded means that assets held in a trust or a separately maintained account. Fully insured means that the benefits are paid through insurance contracts or policies. 4 Form Overview Who must file? (cont.) Welfare benefit plans where the plan assets are held in a trust or separately maintained account. Must file regardless of number of participants Health insurance plans with more than 100 participants must file. Include Schedule A 5 Form Overview Exceptions to the filing requirement All welfare benefit plans with fewer than 100 participants at the beginning of the plan year and is unfunded and/or fully insured. A governmental plan A church h plan under ERISA section 3(33) 6 2

3 Form Overview Participant Rule: If the number of participants reported on line 5 is between 80 and 120, and a Form 5500 annual return/report was filed for the prior plan year, you may elect to complete the return/report in the same category ( large plan or small plan ) as was filed for the prior return/report. This exception is for pension plans. 7 Form Overview Determine which employers must file Send initial employer letter ( ) Gather information used to fill out Form 5500 Complete Form 5500 (generally done with third- party software) Complete any applicable Form 5500 Schedules Verify information on Form 5500 Send signing invitation to employer Tracking work flow 8 Initial Employer Notification Initial letter to plan sponsor/administrator New requirements Detailed instructions to obtain signing credentials How/when TPA will contact when Form 5500 is complete How to print, e-sign and submit filing to the DOL Requirement to print Form 5500, place a wet signature on form and retain in their files Public disclosure of form 9 3

4 Form 5500 Prerequisites Gather information needed to complete the Form 5500 Previous Form 5500 filing, unless this is the first filing for this plan (this information may be obtained through the Form 5500 software or at FreeERISA.com). Plan document, if this is the first filing for this plan Simplified Form 5500 instructions. The number of participants at the beginning and end of the plan year. Name and address for employer signer(s). 10 Use these instructions for an HRA or a Health FSA plan that has more than 100 participants at the beginning of the plan year Complete the Form 5500 with the 2010 printed in the upper right corner for a plan year that began in 2010, including the signature block. Part I Enter the plan year beginning and ending date. Part I, A Check the box which indicates the type of plan entity (do not check more than one box). 11 Multi-employer plan A plan is a multi-employer plan if: 1. more than one employer is required to contribute, 2. the plan is maintained pursuant to one or more collective bargaining agreements, and 3. an election under Code section 414(f)(5) and ERISA section 3(37)(E) has not been made, and (4) the plan meets any other applicable conditions of 29CFR

5 Single-employer plan (Other than a multipleemployer plan) A single-employer plan is an employee benefit plan maintained by one employer or one employee organization. Most employers will select Single- employer plan. Multiple-employer plan A multiple-employer plan is a plan that is maintained by more than one employer and is not one of the plans already described. Do not check this box if the employers maintaining the plan are members of the same controlled group. 13 DFE (specify) and enter the correct letter to indicate the type of entity. NOTE: A "controlled group" is generally considered one employer for Form 5500 purposes, p and would usually check Single-employer plan. 14 Part I, B Check the box(es) which indicate if this filing is: 1. First return filed for this plan. 2. Already filed for this plan year submitting an amended return. Do not mark this as an amended return if your previous submission attempts were not successfully received by EFAST2 because of transmission problems. 3. Plan no longer exists, and this is the final return. Do not check final return/report here if 4R is entered on line 8b. 4R is an unfunded, fully insured, or combination unfunded/fully insured welfare plan that is not terminated, but will not file an annual report for the next plan year pursuant to 20 CFR refers to plans that have fewer than 100 participants at the beginning of the plan year. Do NOT check final if you are reporting participants at the end of the plan year. 15 5

6 Part I, B (cont.) 1. Return is being filed for a plan of less than 12 months. Part I, C Check this box if the benefits paid are subject to the collective bargaining process (even if only some of the employees covered by the plan are members of a collective bargaining g unit). Part I, D Check the box which indicates the type of extension utilized or a DVC program filing: An extension of time was filed. Maintain a copy of the signed Form 5558 Application for Extension of Time to File Certain Employee Plan Returns that was filed. A special extension was afforded the plan through the IRS, DOL and PBGC. Enter description. 16 Part I, D (cont.) An automatic extension was utilized for this plan. Maintain a copy of the employer s extension of time to file their federal income tax return. This filing is under DOL s Delinquent Filer Voluntary Compliance (DFVC) Program. Part II, 1a Enter the formal name of the plan. Part II, 1b Enter the three-digit number assigned to the plan. All welfare or fringe benefit plan numbers start at 501. Part II, 1c Enter the date the plan first became effective. 17 Part II, 2a Enter the name and address of the sponsor. This would be the employer's name if this return is for a single-employer plan. Part II, 2b Enter the nine-digit Employer ID number assigned to the plan sponsor. Part II, 2c Enter the sponsor'ss phone number. Part II, 2d Enter the six-digit business code that best describes the nature of the employer's business. (See the code listing in the Form 5500 instructions.) 18 6

7 Sign Here Enter the name of the individual signing as plan administrator. Sign Here The name of the individual signing as employer plan sponsor or DFE. Generally for a Health FSA or HRA filing, only the plan administrator needs to sign the Form Part II, 3a Enter the name and address of the plan administrator. Usually the administrator is the sponsor even if someone else is doing the bookkeeping. You may no longer enter Same in this field. Part II, 3b Enter the administrator's EIN. Field must contain the administrator s EIN. 19 Part II, 3c Enter phone number of administrator. Field must contain the administrator s phone number. Part II, 4 If name and/or EIN of the plan sponsor is different than last return. 4a Enter the sponsor's name from the last return/report 4b Sponsor's s EIN from the last return/report 4c Plan number from the last return/report Part II, 5 Enter the total number of participants in the Health FSA portion of the cafeteria plan or HRA as of the first day of the plan year. 20 Part II, 6a Enter the total number of participants in the Health FSA portion of the cafeteria plan or HRA as of the end of the plan year. Enter 0 (zero) if you marked Line B of Part I as a final return/report. Part II, 6b Enter the number of retired or separated participants p receiving benefits as of the end of the plan year. Enter 0 (zero) if you marked Line B of Part I as a final return/report. Part II, 6c Enter the number of other retired or separated participants entitled to future benefits. Enter 0 (zero) if you marked Line B of Part I as a final return/report. 21 7

8 Part II, 6d Enter total of lines 6a, 6b and 6c and proceed to line 8. Enter 0 (zero) if you marked Line B of Part I as a final return/report. Part II, 8b Enter the Characteristic Code of 4A (to indicate you are filing for a health plan that is other than dental or vision). Also enter 4R if the plan is not terminated but will not be filing a Form 5500 next year because there are fewer than 100 participants as of the beginning of the next plan year. OR Also enter 4S if the plan stopped filing in an earlier year because there were fewer than 100 participants, but now has 100 or more participants in this plan year and is now required to file. 22 You may enter more than one code under 8b. Part II, 9a 9b Check all boxes that apply to indicate the funding and benefit arrangements used during the plan year. Generally the funding and benefit arrangements for a Section 125 Cafeteria Plan or HRA are General assets of the sponsor. Check your plan document for specific funding and benefit arrangements. Part II, 10a 10b Generally, no schedules are attached to a Form 5500 filed for a welfare benefit plan where the plan benefits are paid from the general assets of the employer. 23 The instructions have been modified to make it clear that those plans that would not have to complete the Schedule H because they meet the conditions of the limited exemption under 29 CFR or Technical Release 92-01, are also not required to complete and file a Schedule C to report information on service provider compensation CFR refers to plans that are an employee welfare benefit plan under the terms of which benefits are to be paid solely from the general assets of the employer or employee organization maintaining the plan, or the benefits of which are provided exclusively through insurance contracts. 24 8

9 Most non-exempt employer plans will complete all the questions on the Form 5500 including 5, 6a through 6d, 8b, and 9a and 9b. Complete 10 only if Schedules will be attached. Depending on the funding arrangement or payments from the plan, attaching Schedules may be applicable. 25 General Processing Tips If the current year Form 5500 is not available before the due date of a short plan year return/report, use the latest Form 5500 available and enter the dates the short plan year began and ended in Part I. A separate Form 5500, with box A(2) checked, must be filed by each employer participating in a plan or program of benefits in which the funds attributable to each employer are available to pay benefits only for that employer s employees, even if the plan is maintained by a controlled group. 26 Form 5500 Beginning with the 2009 plan year, the Form 5500 will be required to be filed electronically Begin filing on January 1, 2010 Private web-based systems Athird-party application that can transmit to the DOL via the Internet The DOL s web-based system (IFILE) 27 9

10 Application for Extension of Time Form 5558 on IRS website at: This is a fill-in-the-blank PDF form 2-1/2 month extension of time to file Form 5500 (page 7-42) Must be filed by original deadline for filing Form 5500 Mailed to IRS Service Center in Ogden, UT Do not attach to electronic filing 28 Form 5558 Plan administrator must keep a copy with the plan s records. The preparer may obtain an extension under Form 5558 without the employer s signature. Indicators on Form 5500 of what type of extension was used for the filing. Form 5558 Automatic Extension The DFVC Program Special extension (enter description) or Amended Forms Prior to 2009 Use the current electronic version with the appropriate dates that the filing covers filings through EFAST on paper until October 15, 2010 or electronically until June 30, 2010 under EFAST, not EFAST2. After October 15, 2010 timely paper filings will no longer be accepted for 2008 plan years and later Start with the original filing and click the amended return/report in Part I and resubmit with the entire report, including all needed schedules and attachments

11 Amended Forms Prior year return to amend? Have to submit entire form, etc. electronically. Amended filing that has been filed electronically under EFAST2 The employer will enter the acknowledgement ID that it received with the previous filing. The acknowledgment ID will then become the reference acknowledgement ID and the filing will receive a new Acknowledgment ID Delinquent Filer Voluntary Compliance Program Effective March 29,, the address for the Delinquent Filer Voluntary Compliance Program (DFVCP) lockbox will change to: DFVC DOL, PO Box 71361, Philadelphia, PA There is no overnight delivery address. Note that submissions to the DFVCP also can be done electronically. To do so, follow the DFVCP penalty calculator instructions for online payment. Schedules Schedule A provided by the insurer Used for fully-insured health plans. Not to be filed for the Health FSA or HRA plans Schedule C The instructions have been modified to make it clear that those plans that would not have to complete the Schedule H because they meet the conditions of the limited exemption under 29 CFR , or Technical Release 92-01, are also not required to complete and file a Schedule C to report information on service provider compensation. CFR refers to plans that are an employee welfare benefit plan under the terms of which benefits are to be paid solely from the general assets of the employer or employee organization maintaining the plan, or the benefits of which are provided exclusively through insurance contracts

12 Schedules More details are contained in the IRS 2010 Instructions for Form 5500 You can find the instructions at: 34 PINs and IDs Filing Author Filing Authors can complete Form 5500/5500-SF and the accompanying schedules, submit the filing and check filing status. Filing Authors cannot sign filings unless they also have the Filing Signer role. If you are using EFAST2-approved third-party software, they do not need credentials. Filing Signer Plan administrator, plan sponsor and direct filing entity. Plan administrator and plan sponsor may be same or different person, but cannot share same PIN and ID. The plan administrator remains legally responsible for the timeliness of the submission of the Form 5500 by a transmitter. 35 PINs and ID Transmitter Transmit Form 5500/5500-SF filings to the EFAST2 system for processing on behalf of others. Transmitters are responsible for the security of all filing information prior to and during its transmission. A Transmitter can be a company, trade, business, or individual. id Depending on the software selected, the plan service provider may not need to register and get credentials as a Filing Author or Transmitter. If the TPA uses IFILE, they will need author credentials

13 PINs and IDs Sharing credentials DOL issued warning after warning about sharing of credentials. In May received a work around for employers not getting their signing credentials for completing the e-sign and filing requirements. New e-signature option for Form 5500/5500-SF electronic filing TPAs may obtain their own signing credentials and submit for the plan. Must have written authorization from the plan administrator. The employer/administrator must manually sign a paper copy of the completed filing. 37 PINs and IDs TPA attaches PDF copy of the first two pages of the manually signed form as an attachment to the electronic filing submitted to EFAST2. TPA must communicate any queries surrounding the form or submission to the plan administrator. TPA must advise the plan administrator/employer that the image of their signature will be visible on the publically posted filing. 38 Public View Filings are made available to the public immediately upon filing 39 13

14 Submission and Filing If modifications are made to the form after entering the electronic signature and before the transmission, the signatures would be voided and the employer would have to e-sign again. An Acknowledgement ID means EFAST2 received and electronic envelope but is does not necessarily mean EFAST2 received the filing. Approximately 20 minutes after submission, the transmitter or the signer(s) can check the filing status using the software used to submit. 40 Submission and Filing Check the filing status through your Form 5500 software or EFAST2 to ensure that the filing was received. Provider may have signers review, print and sign within the software system. Others may invite the signers to a signing ceremony online at EFAST2. Employer must print and wet sign a copy of the Form 5500 and keep the signed copy for their records. This completes the filing. Size of the file being sent must not be bigger than 100 MBs. 41 Filing at the Last Minute It will take approximately 90 seconds to find out whether the return is processed. DOL treats a return as filed when it issues a status of filing stopped, filing error, or filing received. Print the unsuccessful transmission notice and include the notice as an other attachment. With the resubmission of the return as a PDF. Facts and circumstances determine whether the filing will be considered timely. Midnight in the plan administrator s time zone is the deadline

15 Other Tips and Tricks Plan administrators, not plan sponsor s address on line 3a indicates time zone. Line 3a If same as plan sponsor, enter Same. No longer applicable fill in 3a, 3b, and 3c with full information All electronic filings available to the public within one day at: You do not need signing credentials to view these. Consider turning off pop-up blockers for acknowledgements or other messages from EFAST2. 43 Other Tips and Tricks Plan signers can use same credentials for both pension and welfare filings. PIN and ID for EFAST? You need a new PIN and ID for EFAST2. Need: Internet connection, creating PDF, scanner for forms you might receive in paper format. 44 Other Tips and Tricks Want to look at a blank Form? 2010 form and schedules are not available on the IRS website. Available on DOL website at: Form 5500 instructions:

16 Previous Form 5500 Filings To find 2009 and 2010 filings: cution=e1s1 Filings prior to 2009: p 46 Need Help? EFAST2 Help Line Flexible Benefits Training Form 5500 Electronic Filing 16