By: HUB’s EB Compliance Team

The previous articles in our series about Form 5500 have explained some of the basics regarding the form, including the basic definition and expectations of the form, who needs to file the form, and the key components of the form. Authority over Form 5500, which is used for reporting information concerning employee benefit plans, is shared among two primary agencies: the U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS). The Employee Benefits Security Administration (EBSA), a department within the DOL, oversees the administration and compliance of Form 5500 filings, and the IRS requires Form 5500 to ensure compliance with the Internal Revenue Code. These agencies collaborate in the use of Form 5500 to streamline the reporting process and reduce the filing burden for plan administrators and employers.

Due Dates

Form 5500 due dates for health and welfare plans are a crucial piece of information to maintain compliance with ERISA regulations. Form 5500 must be filed by the last day of the seventh month after the end of the plan year. For a calendar year plan, this means the due date is July 31st of the following year. If more time is needed, an extension of 2.5 months can be requested by filing Form 5558 with the IRS by the original due date. An extension may not be granted if requested after the original due date.

If the plan year is shorter than 12 months, the due date is still the last day of the seventh month after the end of the plan year.

Penalties

A missed or delinquent Form 5500 may be assessed penalties from both the IRS and the DOL. The IRS imposes a penalty of $250 per day for late filing, up to a maximum of $150,000 per plan year. The DOL can impose penalties of up to $2,670 per day, with no maximum limit. The agencies allow for penalty relief using the delinquent filer voluntary compliance program (DFVCP). This program allows plan administrators to voluntarily correct late filings and reduce penalties. Penalties are capped at $1,500 per submission for small plans (fewer than 100 participants) and $4,000 per submission for large plans (100 or more participants).

Filing Process

Form 5500 must be filed electronically using the DOL’s EFAST2 system. This system allows for efficient submission and processing of the form. Plan Sponsors may choose to file on their own or obtain the services of a third party to assist in filing. To file in-house, the Plan Administrator will need to obtain a login.gov account to access EFAST2. After the creation of the account, the Plan Administrator will need to register with EFAST2 credentials to obtain the required User ID and PIN.

Instead of setting up online accounts, a third-party partner may only require a wet signature from the Plan Administrator that allows the third party to file on behalf of the Plan.

Regardless of the method used to file, records should be maintained for a minimum of seven years, including all records used when creating the Form.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER
Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only, and is not intended to constitute legal or tax advice as to an organization’s or individual's specific circumstances. It is based on Hub International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and Hub International does not have an obligation to update this information. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your or your organization’s particular needs.