Regulators Propose to Eliminate Form 5500 Small Plan Exemption and Expand Data Collection for All Plans
The US Department of Labor (DOL) recently published proposed regulation revisions to Form 5500 Annual Return/Report in the Federal Register. Form 5500 is the primary source of information about the operation, funding, assets, and investments of pension and other employee benefit plans. A July 11, 2016 DOL news release states the proposed revisions are intended to improve and modernize Form 5500.
Currently, employers sponsoring a group health plan with 100 or more participants must electronically file Form 5500 on an annual basis. The DOL is now proposing to eliminate the current exemption from filing Form 5500 for employers that sponsor group health plans with fewer than 100 participants. If finalized, small employers would then have the same reporting burden as large employers.
The DOL also proposes all employers sponsoring a group health plan must complete the new Schedule J, Group Health Plan Information, through selected new questions regarding plan operations, service provider relationships and financial management of the plan.
According to a Legislative/Regulatory Update issued by the Self-Insurance Institute of America (SIIA), the administrative burden associated with the proposals will be considerable. “This new Schedule J requires the reporting of certain data regarding the plan’s assets. The Schedule J will also capture certain information like enrollment and disenrollment, data on the number of denied claims, and information on cost-sharing with respect to out-of-network coverage, all of which is required under the new Public Health Service Act (PHSA) section 2715A reporting requirement. In addition, the Schedule J will require an employer to explain (1) how its plan improves health outcomes through quality reporting, effective case management, and chronic disease management, (2) how its plan prevents hospital readmissions, and (3) how its plan implements activities to improve patient safety and reduce medical errors and activities to promote wellness, all of which is required under the new PHSA section 2717 reporting requirement.”
SIIA also reports, “the DOL estimates that the elimination of the “small plan” exemption will add 2.2 million work hours and $241.6 million in reporting costs for small employers (both self-insured and fully-insured).”
The proposal was published in the Federal Register on July 21, 2016, with public comments from interested persons due no later than October 4, 2016.
To Download: Form 5500 Proposed Changes
For more information on EthiCare Advisors, Inc., please call Mark S. Hartmann, Jr., MS at (888) 838-4422 extension 703 or e-mail him at Mark@EthiCareAdvisors.com.