Back in July 2016, the Department of Labor (“DOL”) proposed some changes to the Form 5500 annual report. The proposed changes were extensive and were targeted for 2019 plan year reporting (which would occur in 2020). However, the proposal has yet to be finalized and now seems very unlikely to be finalized for the 2019 plan year.
The More Things (Look Like They’ll) Change…
In general, the changes, if finalized as proposed, would result in a major overhaul of the Form 5500 reporting regime. The proposed changes included:
- Requiring all health and welfare plans with fewer than 100 participants to file (currently, nearly all plans of this size are exempt); and
- The addition of a new Schedule J that would have included substantial additional group health plan information, such as eligibility rules, benefits available under the plan, and information about COBRA-covered individuals.
The DOL solicited comments on the proposal. Some groups called on the DOL to withdraw the proposed changes and reevaluate saying that the changes would dramatically increase the cost of maintaining a plan.
…The More They Stay the Same (for Now)
At least for now, employers can breathe a sigh of relief. The DOL does not appear to be in any rush to finalize the changes. First, the original press release about the proposed changes on the DOL website now notes that some news releases issued before January 20, 2017 (the date of President Trump’s inauguration) “may be out of date or not reflect current policies.”
Second, at a recent conference attended by some of Hub’s Chief Compliance Officers, DOL officials informally commented that they do not expect the Form 5500 changes to be finalized any time soon because of other priorities. While these comments are not an official statement of DOL policy, and only reflect the opinions of the individuals who spoke at the conference, they represent a useful data point.
Finally, given that the proposal would require extensive changes to reporting software and other systems of third party administrators and other parties, an attempt by the DOL to finalize this proposal for the 2019 plan year at this point would result in significant objections from industry stakeholders.
All of these factors combine to make it very unlikely that the DOL will seek to finalize any significant Form 5500 changes for the 2019 plan year. Therefore, while employers want to keep an eye out for future proposed Form 5500 changes, they most likely need not worry that 2019 will result in significant additional reporting requirements.
NOTICE OF DISCLAIMER
The information herein is intended to be educational only and is based on information that is generally available. HUB International makes no representation or warranty as to its accuracy and is not obligated to update the information should it change in the future. The information is not intended to be legal or tax advice. Consult your attorney and/or professional advisor as to your organization’s specific circumstances and legal, tax or other requirements.