Are you ERISA Compliant?
Do you think that you are ERISA compliant? The DOL has released the 2017 Form 5500, which is very similar to the 2016 Form 5500. While similar, there is a big difference, where if the Plan Name changed from 2016 to 2017- you must note this on the second page of the 2017 Form 5500. What this means is that something’s up with the DOL and health and welfare plans- are they ramping up enforcement?
As most employers know, group health plans with less than 100 participants at the beginning of the plan year are exempt from filing a Form 5500 if the plan is unfunded, fully insured or a combination of unfunded and fully insured. Currently, the Form 5500 for self-insured plans contains very little information.
As we have previously reported, barring a change in plans from the DOL, all employers, even those under 100 participants in the health and welfare plans will now have to file Form 5500 in 2019. Are you ready?
Also of interest (or of note!) the DOL has been making changes to its 5500 – subtle as it may be. Its latest change is for an employer/plan sponsor to report its Plan Name change – which was not required before 2017.
5500s have been around since reporting began back in the 1970s and yet this is the first time the Plan Name change is to be noted (The DOL has requested for changes in the Plan Sponsor name or its EIN/ Tax ID to be pointed out).
Many lawyers and ERISA experts are wondering if the DOL is starting to focus on the Plan Name changes as a segue way to also show more emphasis to be given to Plan Documents and Summary Plan Documents (SPDs). After all, the 5500 is a reflection of the Plan Documents/SPDs; however many Plan Sponsors don’t know of Plan Documents, the SPDs, their ERISA compliance requirements or the penalty fees for noncompliance.
The DOL has not really promoted Plan Documents in many aspects, except they do ask for the documents immediately when the audit is to be conducted.
Why the switch? Could it be that the DOL is going to be looking for more information and more details on Plan Documents and SPDs via the Form 5500. Will those proposed 2019 Form 5500 changes (making all plan sponsor/employers – even those with less than 100 participants) really come to light down the road?
The proposed changes to the 2019 Form 5500s (which have remained under the radar now for many months) included a new Schedule J. And on the Schedule J the Plan Administrator of the Plan is to vouch if the SPD has been distributed to the Plan Participants. If the Plan Sponsor has not, then they were to check off no. As a result though, they would be out of compliance and the DOL could choose to apply the penalty. We are nervous if this is the development since we are very well aware of so many who are not in compliance on Plan Documents and SPDs
Luckily for our clients, myHRcounsel offers a complete solution to your ERISA compliance needs for just $140 per month. Most companies are not in compliance, even the DOL knows it – but times could be changing. You must have an ERISA-compliant SPD’s or Wrap document (even if your plan has one participant) and you must distribute these documents within a certain time period. SMM’s and dozens of other notices are also required under ERISA.
To sign up for myHRcounsel’s employment law offering or ERISA Complete, simply click below and submit your company information:
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