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IRS Eliminates 5500
Schedule F No Longer Required
From FlexAmerica:
"The IRS announced on April 4th that it is suspending the requirement to file a 5500 for certain welfare benefits plans for all prior, current and future years. Specifically, cafeteria plans, including premium only
plans, dependent care assistance plans and flexible spending accounts under Section 105, no longer have to file a 5500 if their plan meets the
following criteria. Plans that have less than 100 participants at the beginning of the plan year and plans that do not hold plan assets in
trust. It is important to note this exception does not eliminate the testing requirement for these plans.
You will want to carefully review the following details in light of this announcement to determine if there is a 5500 filing requirement. Plans that wrap the premium only plan with the flexible spending account should review their participation. For example, an employer with 250
employees that has 150 participants deferring premiums through the premium only plan and 50 participants with flexible spending accounts
(daycare or healthcare spending account) will still have to file a 5500 while a premium only plan with 250 eligible employees and 90 employees
deferring premiums does not have to file a 5500.
The second requirement for the small plan exception is that the employer not hold the employee deferrals in a trust or separate bank account. For example: an employer that has a flexible spending plan who places the employee deductions in a separate checking account titled "ABC Flex Plan" will still have to file a 5500 even if they have a total of 20 employees. On the other hand, if the employer transfers the exact amount of money to cover the weekly claims run into the "ABC Flex Plan" account, then no 5500 will be required. Basically the IRS is saying that employers who are segregating plan assets are subject to ERISA and thus need to file a 5500 regardless of the number of employees.
Don't forget that all plans are still subject to testing. A basic summary of those rules can be found at
http://www.flexamerica.com/discrimination.htm."
"The IRS announced on April 4th that it is suspending the requirement to file a 5500 for certain welfare benefits plans for all prior, current and future years. Specifically, cafeteria plans, including premium only
plans, dependent care assistance plans and flexible spending accounts under Section 105, no longer have to file a 5500 if their plan meets the
following criteria. Plans that have less than 100 participants at the beginning of the plan year and plans that do not hold plan assets in
trust. It is important to note this exception does not eliminate the testing requirement for these plans.
You will want to carefully review the following details in light of this announcement to determine if there is a 5500 filing requirement. Plans that wrap the premium only plan with the flexible spending account should review their participation. For example, an employer with 250
employees that has 150 participants deferring premiums through the premium only plan and 50 participants with flexible spending accounts
(daycare or healthcare spending account) will still have to file a 5500 while a premium only plan with 250 eligible employees and 90 employees
deferring premiums does not have to file a 5500.
The second requirement for the small plan exception is that the employer not hold the employee deferrals in a trust or separate bank account. For example: an employer that has a flexible spending plan who places the employee deductions in a separate checking account titled "ABC Flex Plan" will still have to file a 5500 even if they have a total of 20 employees. On the other hand, if the employer transfers the exact amount of money to cover the weekly claims run into the "ABC Flex Plan" account, then no 5500 will be required. Basically the IRS is saying that employers who are segregating plan assets are subject to ERISA and thus need to file a 5500 regardless of the number of employees.
Don't forget that all plans are still subject to testing. A basic summary of those rules can be found at
http://www.flexamerica.com/discrimination.htm."
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