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Category: Finance
Satisfied Customers: 3698
Experience:  Providing Financial & Tax advice since 1986
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I am in the process of filing our form 5500 for our welfare

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I am in the process of filing our form 5500 for our welfare plans for 2012. We have voluntary dental and vision insurance for which their are less than 100 participants and is totally funded by the employee as a voluntary election. The employer contributes nothing. Overall, we have greater than 100 employees that are in our welfare program as a whole, but these voluntary insurances have less than 100 participants. Do we have to file a schedule A associated with the 5500 form since it is voluntary and not funded by the employer and has less than 100 participants?
Submitted: 1 year ago.
Category: Finance
Expert:  Lane replied 1 year ago.

NPVAdvisor :

Hi, do you mean Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits (formerly Schedule SSA (Form 5500)?

NPVAdvisor :

Still don't see you coming into the chat, so I'll switch to the Q&A mode ... maybe that will help

NPVAdvisor :

But if you are referring to the separated participants disclosure, you don't file that with Form 5500–SF. File the statement separately with the IRS.

NPVAdvisor :

Let me know if you have further questions

NPVAdvisor :


Expert:  Lane replied 1 year ago.
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Customer: replied 1 year ago.
I am referring to form 5500, annual return report of mployse benefit plan. Schedule a reports all insurance vendors that qualify.
Expert:  Lane replied 1 year ago.
My apologies:

If Form 5500 line 9a(1), 9a(2), 9b(1), or 9b(2) is checked, indicating that either the plan funding arrangement or plan benefit arrangement includes an account, policy, or contract with an insurance company (or similar organization), at least one Schedule A would be required to be attached to the Form 5500 filed for a pension or welfare plan to provide information concerning the contract year ending with or within the plan year.

If there's an ASO in place where you're funding it but the insurance company is only providing administrative service you do not, however.

Give me a litte more time here, but it appears that because the benefit would paid by an insurance account that's enough.

Still doing some research

Customer: replied 1 year ago.
The employee is funding 100 pct
Expert:  Lane replied 1 year ago.

OK here we go.

They'll meet the less than 100 rule under these conditions:

A small welfare plan has less than 100 enrolled employees on the first day of the plan year and has no trust.

A (1) welfare plan that (2) covers fewer than 100 participants as of the beginning of the plan year and is (3) unfunded, fully insured, or a combination of insured and unfunded is not required to file Form 5500.

Who is a “participant”?

"Participants" are:

1. Active employees covered by the plan.

2. Retired employees covered by the plan. This includes former employees who are receiving group health continuation coverage benefits under COBRA.

3. Deceased former employees who had one or more beneficiaries who are receiving benefits under the plan.

Dependents are considered neither participants nor beneficiaries. A child who is entitled to health benefits under a qualified medical child support order should not be counted as a participant.

And they will be considered voluntary plans under the following criteria:

An employer has a voluntary plan where:

  • no contributions are made by an employer;
  • participation in the program is completely voluntary;
  • the sole functions of the employer with respect to the program are, without endorsing the program, to permit the carrier to publicize the program to employees and to collect premiums through payroll deductions and to remit them to the carrier; and

The employer receives no consideration in the form of cash or otherwise in connection with the program (other than reasonable compensation, excluding any profit, for administrative services actually rendered in connection with payroll deductions).

The third bullet point is key. Endorsing a program may include defining eligibility, recommending the program, allowing contributions to go through a cafeteria plan, selecting the carrier, negotiating the terms, or assisting participants with claims. Any of this employer involvement may cause the plan not to be voluntary.

And finally, can be looked at as separate plans following these criteria:

A plan sponsor could create (1) one plan providing major medical benefits, dental benefits, and vision benefits, (2) two plans with one providing major medical benefits and the other providing self-insured dental and vision benefits, or (3) three separate plans. Governing documents and actual operations should be reviewed to determine whether welfare benefits are being provided under a single plan or separate plans.

If you don't use a wrap document to advise of these plans, and if employee communications refer to these plans as different arrangements, then you have a small, voluntary plan for the dental and vision. and would not need to do the schedule A.

If you've administered these plans as parts of the same plan, and the insurance company is not simply providing ASO services only, then you'll need to do the schedule A.

Category: Finance
Satisfied Customers: 3698
Experience: Providing Financial & Tax advice since 1986
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