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Sunday, 28 August 2016 18:03

Proposed 5500 Revisions Create Burdens for Small Businesses

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On July 11, 2016, the Department of Labor (DOL) and Internal Revenue Service (IRS) announced a proposal to implement significant changes to the forms and regulations that govern annual employee benefit plan reporting on Form 5500. 
 
Most notably, the revisions would require companies of any size or funding arrangement to file a Form 5500 as well as add a new Schedule J (Group Health Plan Information) to the Form 5500. 
 
The proposed changes, which were published in the Federal Register on July 21, 2016, would considerably increase the annual reporting obligations for nearly all health and welfare plans. The revised reporting requirements, if adopted, would apply for plan years beginning on and after January 1, 2019.  
 
Schedule J would require group health plans to report detailed information about plan operations and compliance with both ERISA and the ACA. For example, plans would be required to disclose, among other things:
  • The number of participants and beneficiaries covered under the plan at the end of the plan year.
  • The number of individuals offered and receiving COBRA coverage.
  • Whether the plan offers coverage for employees, spouses, children, and/or retirees.
  • The type of group health benefits offered under the plan.
  • The nature of the plan’s funding and benefit arrangement
  • Information regarding participant and/or employer contributions and rebates, refunds or reimbursements from service providers.
  • Stop-loss coverage premiums, information on the attachment points of coverage, individual and/or aggregate claims limits.
  • Detailed claims payment data, including information regarding how many benefit claims were submitted, appealed, approved and denied during the plan year, as well as the total dollar amount of claims paid during the plan year. No fully-insured small group employer would have access to this information, imposing a serious challenge to fulfilling this requirement. 
 
Employer sponsors of group health plans should begin to evaluate plan documentation and the potential new disclosures required by Schedule J to ensure that each plan sponsor will be in a position to access such information and adequately communicate the new reporting requirements. You can review more details of the Form 5500 Improvement and Modernization Proposal on the Fact Sheet located here
 
The DOL is seeking written comments on the proposed changes, which must be provided by October 4, 2016. The proposed revisions to Form 5500 are complex and will likely be subject to a number of changes in response to comments received by the DOL. Public comments can be submitted electronically or by paper to the addresses listed below:
 
You can fight back against this requirement!  We encourage you to submit comments indicating how this proposed rule would impact you.  Here’s how:
 
DATES: Written comments must be received by the Department of Labor on or before October 4, 2016. 
 
ADDRESSES: To facilitate the receipt and processing of written comment letters on the proposed regulation, EBSA encourages interested persons to submit their comments electronically. You may submit comments, identified by RIN 1210–AB63, by any of the following methods: 
Federal eRulemaking Portal: https://www.regulations.gov. Follow instructions for submitting comments. 
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.. Include RIN 1210–AB63 in the subject line of the message. 
Mail: Office of Regulations and Interpretations, Employee Benefits Security Administration, Attn: RIN 1210–AB63; Annual Reporting and Disclosure, Room N–5655, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210. 
Instructions: All comments received must include the agency name and Regulatory Identifier Number (RIN) for this rulemaking (RIN 1210–AB63). Persons submitting comments electronically are encouraged not to submit paper copies. All comments received will be made available to the public, posted without change to http:// www.regulations.gov and http:// www.dol.gov/ebsa, and made available for public inspection at the Public Disclosure Room, N–1513, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210, including any personal information provided.
 
Read 593 times Last modified on Monday, 29 August 2016 12:25
Juliet Fitzgibbons

Juliet joins Fall River as an Account Executive and brings over 15 years of prior broker and account management experience. Her experience brings extensive knowledge on employee benefit programs, account management and creative cost-saving strategies and compliance solutions for employers of various sizes.

She is responsible for new business proposals, client renewals including plan benchmarking, rate analysis and mid-year reviews. She helps clients navigate healthcare systems and educates employers and employees through open enrollment meetings and day-to-day service requests. Juliet joined Fall River in 2015.