Everything a health subrogation professional needs to know about Form 5500

Transcription

1 Everything a health subrogation professional needs to know about Form 5500 Presented by: Lisa S. H. Boero, Esq. Security Health Plan of Wisconsin, Inc., Chief Legal Officer Sara J. Skrzeczkoski, CSRP Security Health Plan of Wisconsin, Inc., Subrogation Manager Matthew R. Falk, Esq. Falk Legal Group LLC

2 Objectives Overview of Form 5500 Statutory Framework Types of Plan(s) Subject to Reporting Discussion of Form(s) Impact on Subrogation & Reimbursement Claims From In-house Subrogation Prospective From Outside Subrogation Counsel Prospective Discuss topics such as Predictions regarding future legislation Time-sensitive case management Claims and subrogation department environments Practical Considerations For Folks in the Field Plan Sponsors/Subrogation Specialists Counsel Interaction with the SPD, Plan Documents Electronic Resources

3 What is a 5500? An information report that is submitted to the DOL s Employee Benefits Security Administration (EBSA) for a Health and Welfare Benefit or a Retirement Plan of a sponsor that is subject to ERISA reporting and disclosure requirements

4 Sample Form

5 Health and Welfare Plan Types Single Employer Plan Unfunded Fully Insured or Self-Funded (employer s general assets) Typically prepared by agents Multiple employer Plan and Multiemployer Plan (MEWA) A Multiple Employer plan is a plan maintained by an organization for several entities that do not have sufficient common ownership to be considered a single employer plan Multiemployer Plans are plans maintained by collective bargaining units Form M-1 filings (if required) should be prepared by the client s auditors Voluntary Employee Beneficiary Association (VEBA Trust) Plan Funded contributions to the Trust are assets For exclusive benefit of plan participants Additional schedules required Schedule C Service Provider Information Schedule H Financial Information Independent Public Accountant s Opinion Plan auditor generally prepared these 5500s due to audit requirements and additional schedules

6 When is a Plan Subject to Filing Form 5500? Welfare Plans that must file Private employer plans (for profit and non-profit) VEBA Trusts At least 100 participants (covered employees) at beginning of plan year Welfare Plans not subject to filing Governmental plans Church plans (but churchowned entities such as hospitals, nursing homes, and others employing primarily lay staff are subject) Private plans with under 100 participants at beginning of plan year Statutory benefits (statemandated disability, unemployment compensation, workers compensation) Non-ERISA fringe benefits

7 Types of Welfare Plans Subject to Reporting and Disclosure Health Plans Health FSAs and HRAs Medical Dental Vision Employee Assistance Plans (subject to ERISA if the plan provides treatment, not just referral) Ancillary Benefits Life Long and Short Term Disability Accident and Sickness Indemnity Plans Long Term Care Prepaid Legal Funded Scholarship Programs Severance Pay Plans

8 Special Rules for Voluntary Plans Exception for voluntary plans with NO ELEMENT of employer sponsorship Product is available on the street at the same price as is offered by the employer regardless of the employer-employee relationship. Participants receive individual policies, rather than group certificates of coverage. Employer did not negotiate terms or pricing of product. Employer does not endorse or communicate the program in any way as a benefit of the employer-employee relationship. No compensation to employer (cash or otherwise). Premiums are deducted from employees pay post-tax outside the employer s cafeteria plan. Only employer functions are making payroll deductions, remitting premiums to carrier, and providing Voluntary Plan agents access to employees.

9 Plans Not Subject to Reporting and Disclosure Dependent Care Assistance Plans Payroll Practices (vacation, sick pay, holiday pay) Holiday gifts Discount cards Sales to employees Non-ERISA fringe benefits (e.g., discount plans, memberships, identity theft protection, group homeowner and auto insurance, transportation assistance, etc.) Industry advancement programs, unfunded scholarship programs Statutory benefits (unemployment, workers compensation, statutory disability) Certain voluntary plans (with NO employer sponsorship)

10 Data Collection For each plan, you will need a copy of the prior Plan Year 5500 Compare current year data to last year s Note any changes to: Employer/Plan Sponsor Name, Address, Phone Number, Federal Tax ID Number, etc. Carrier(s) Funding mechanism (fully insured or self-insured) (Since 2014) If the plan is a multiemployer plan, the DOL requires that the 5500 reflect each employer s name, Federal TIN # and approximate percentage of total cost of the plan by participating entity.

11 Data Collection For a NEW group for which you have not previously prepared Form 5500, you can obtain a copy of 2009 and later filings off the EFAST system: Click on 5500/5500SF search in the middle of the Welcome screen Enter either the plan administrator s name (or a portion of the name) or the Federal Taxpayer ID number (without the - ) You may select a filing year in the drop down (or leave it blank and it will return all previous filings under EFAST) Need to see an older filing? Try (you will need to register for a password).

12 Data Collection Fully Insured Plans Each insured policy requires a Schedule A be attached to Form For each insurance contract, you must collect Schedule A information from the carriers (segregated for each policy number or separate ERISA plan being reported), including Number of persons covered and participants at the end of the Plan Year (employees AND members) by line of coverage Name of Carrier Carrier s Federal Tax ID Number and NAICS Code, if applicable (a listing by carrier is provided in the software instruction manual if not included) Policy/Contract Number Commissions and Incentive/Extra Compensation paid to brokers (identifying broker name and address) Line of Coverage (e.g., health, dental, life, AD&D, vision, long term disability, short term disability, etc.) Premiums paid during the reporting period (experience-rated contracts may need additional information such as premiums, claims, reserves, etc.)

13 Data Collection Fully Insured Plans Special note on Plan Year vs. Policy Year Policy year reported by carrier may be different than the ERISA plan fiscal year Report for the period ending within the ERISA plan year

14 Troubleshooting Fully Insured Schedule A Data Double-check the data provided by the carriers/tpas you need to know BOTH total members and total participants (subscribers) at the beginning and end of the plan year to complete Form 5500 and Schedule A Many HMOs or other fully insured health carriers will report members, rather than contracts. Members (employees and dependents) are used for Schedule A For Form 5500, a plan participant is a contract holder (employee/subscriber). If you do not have an actual participant count as of the first day of the plan year, use the year-end count from the prior year s 5500

15 Data Collection Self-Insured Plans For an unfunded plan (paid by sponsor using general assets, not from plan assets): No Schedule A attachments are required for Stop Loss. Fees do not need to be disclosed (no Schedule C) reporting is required (they are ERISA plans). To complete Form 5500, you will need to know: Number of active participants (employees, NOT members) at the beginning of the Plan Year Number of retirees and COBRA participants at the beginning of the Plan Year. Number of active participants at the end of the Plan Year. Number of retirees and COBRA participants at the end of the Plan Year. Type of benefit (e.g., medical, dental, medical FSA, short term disability, severance pay, etc.)

16 Summary Annual Reports What are they? A summary of the information filed with EBSA on Form 5500 Informs participants of their right to request information, including a copy of the full annual report (Form 5500) ERISA requires distribution to plan participants (see exception for unfunded self-insured plans on next slide)

17 Summary Annual Reports Funded Plans Trust or Insurance Required to provide participants with Summary Annual Report Deadline: 2 months after 5500 filing deadline Unfunded, self-funded plans (financed by sponsor with General Assets) NOT SUBJECT to Summary Annual Report disclosure requirements No SARs are provided for these plan types (however, if self-insured plans are wrapped with fully insured benefits on a combined Welfare Plan Form 5500, a SAR will be produced reflecting insurance costs only). For self-insured plans, you may add self-insured plan information to the SAR (above insurance information ), but this is not required If you wish to reflect the existence of self-funded benefits, use similar language as follows: [Name of plan sponsor] has committed to pay [medical, dental, short term disability, etc.] claims incurred under the terms of this Plan.

18 Filing Deadlines 5500s are due the end of the 7 th month following the close of the plan year E.g., for a plan year 1/1-12/31, the deadline is 7/31 Exception: When the filing deadline falls on a weekend or holiday, the filing is due the next business day Carriers must provide necessary data within 120 days after the end of the plan year (e.g., by 4/30 for a calendar year plan) A 2-1/2 month extension is available (a Form 5558 Extension Application must be filed with IRS postmarked by the 5500 filing deadline) Automatic extension: If the plan sponsor s ERISA plan year and tax fiscal year are the same, and the sponsor files a tax return extension, the 5500 deadline can be extended to the new tax filing deadline

19 General 5500 Filing/Disclosure Deadlines ERISA Plan Year General 5500 Filing Deadline* SAR Deadline Deadline with Extension** 1/1-12/31 7/31 9/30 10/15 12/15 2/1-1/31 8/31 10/31 11/15 1/15 3/1-2/28 9/30 11/30 12/15 2/15 4/1-3/31 10/31 12/31 1/15 3/15 5/1-4/30 11/30 1/31 2/15 4/15 6/1-5/31 12/31 2/28 3/15 5/15 7/1-6/30 1/31 3/31 4/15 6/15 8/1-7/31 2/28 4/30 5/15 7/15 9/1-8/31 3/31 5/31 6/15 8/15 10/1-9/30 4/30 6/30 7/15 9/15 11/1-10/31 5/31 7/31 8/15 10/15 12/1-11/30 6/30 8/31 9/15 11/15 Extended SAR Deadline *If deadline is on a weekend or holiday, deadline automatically rolls forward to 1 st following business day **Extension Application must be filed, postmarked by general 5500 filing deadline

20 Late or Missed Filings Standard Penalties (when DOL identifies compliance defect) DOL Penalty Per Delinquent ERISA Plan Filing Up to $1,100/day Penalty Penalties toll separately for each year for multiple years of failure to file Multiple missed filings generate multiple penalties Additional IRS Penalty may be assessed, up to $25/Day (Maximum $15,000) Voluntary Compliance under Delinquent Voluntary Compliance Program (DFVCP) Per Delinquent ERISA Plan Filing Up to $10/day penalty Maximum of $2,000 per plan per filing year Capped at $4,000 per plan for multiple years of missed filings Reasonable Cause abatement of penalties may be available If accepted, no further communication from DOL and no penalty assessed If rejected, penalties may be assessed under either penalty strategy Sponsors who have received delinquent filing notice from DOL are not eligible for penalty reduction under DFVCP or for a reasonable cause exception.

21 Impact on Reimbursement and Subrogation Claims The In-House Subrogation Department Perspective The Outside Counsel Perspective

22 Practical Considerations For Folks in the Field Plan Sponsors Subrogation Specialists Counsel Interaction with the SPD, Plan Documents and Affidavits Electronic Resources

23 Resource Material 5500 Preparer s Guide