What is a 5500 Report?
- The Form 5500 Series is an important compliance, research, and disclosure tool for the Department of Labor, a disclosure document for plan participants and beneficiaries, and a source of information and data for use by other Federal agencies, Congress, and the private sector in assessing employee benefit, tax, and economic trends and policies. The Form 5500 Series is part of ERISA’s overall reporting and disclosure framework, which is intended to assure that employee benefit plans are operated and managed in accordance with certain prescribed standards and that participants and beneficiaries, as well as regulators, are provided or have access to sufficient information to protect the rights and benefits of participants and beneficiaries under employee benefit plans.
- In general, all group health plans covered by the Employee Retirement Income Security Act (ERISA) are required to file Form 5500. However, group health plans (whether fully insured, self-insured, or a combination of the two) that covered fewer than 100 participants as of the beginning of the plan year are exempt from the Form 5500 filing requirement. More information may be found at the Department of Labor website www.dol.gov
Do you know the Pay or Play Rules?
- Beginning in 2014, employers with 50 or more full-time employees (including full-time equivalents) may be required to pay a penalty tax, also known as a “shared responsibility payment,” if any of the employer’s full-time employees are certified to receive a premium tax credit or cost-sharing reduction for enrolling in coverage through a Health Insurance Exchange.
- The IRS has updated its existing Q&As on the Affordable Care Act’s employer shared responsibility (“pay or play”) requirements, including related to basics for small employers. The Additional Information Q&As also provide specific employer health coverage scenarios that analyze whether or not a pay or play penalty would be owed; outline the special rules related to seasonal workers, seasonal employees, and controlled groups; and highlight how to count hours of service for paid and unpaid interns.
- In general, under the employer shared responsibility (“pay or play”) provisions of the Affordable Care Act (ACA), applicable large employers—generally those with 50 or more full-time employees, including full-time equivalent employees—may be subject to a penalty if they do not offer minimum essential coverage that is affordable and provides minimum value to their full-time employees (and their dependents).Minimum Essential Coverage: Minimum essential coverage includes, among other things, coverage under an employer-based plan (including self-insured plans, retiree plans, and COBRA coverage). It does not include fixed indemnity, life insurance, dental, or vision coverage. Click here for more on what qualifies as minimum essential coverage.
Affordable Coverage: For plan years beginning in 2018, coverage is generally considered affordable if the employee’s required contribution for the lowest cost self-only health plan is 9.56% or less of his or her household income for the taxable year. Given that employers are unlikely to know an employee’s household income, for purposes of pay or play, they may use a number of safe harbors to determine affordability, including reliance on Form W-2 wages.
Minimum Value: An employer-sponsored plan provides minimum value if it covers at least 60% of the total allowed cost of benefits that are expected to be incurred under the plan. Employers generally must use a minimum value calculator developed by the U.S. Department of Health and Human Services (HHS) to determine if a plan with standard features provides minimum value. Plans with nonstandard features are required to obtain an actuarial certification for any nonstandard features. HHS has also proposed regulations for certain safe harbor plan designs that will satisfy minimum value.
How does ACA affect you?
- Affordable Care Act (ACA): The comprehensive health care reform law enacted in March 2010. The Affordable Care Act contains comprehensive health insurance reforms and includes tax provisions that affect individuals, families, businesses, insurers, tax-exempt organizations and government entities. These tax provisions contain important changes, including how individuals and families file their taxes. The law also contains benefits and responsibilities for other organizations and employers.
Did you know the Summary of Benefits and Coverage (SBC) is now required of all Carriers?
- The ACA requires group health plans provide participants and beneficiaries with an SBC containing specific information about the plan and coverage. The U.S. Department of Labor (DOL) has released a new set of Frequently Asked Questions (FAQs) relating to the new summary of benefits and coverage (SBC) notice requirements under Health Care Reform.
Capital Group Benefits partners with HR360 for HR Compliance. Information obtained from HR360 site.