EBSA helping plan sponsors who do not receive fee disclosures

Covered service providers were required to provide fee disclosures to plan sponsors effective July 1, 2012.  But what should a plan sponsor do if they didn't receive the disclosures?  The plan sponsor should request the information from the covered service provider in writing. If the covered service provider does not provide the information, the plan sponsor must notify the DOL either by paper or electronically.

The DOL has changed the mailing address, provided a sample notice and announced a new website which will enable the plan sponsor to notify the DOL electronically.

Why is this so important? Per the DOL website "If a service provider fails to provide the required information, the contract or arrangement between the plan and the service provider is prohibited by ERISA, and the plan fiduciary will have engaged in a prohibited transaction."  However, there is an exemption if the plan sponsors requests the missing information and if not received notifies EBSA.

IRS chart for W-2 reporting of health care costs

The IRS website contains a chart which is a handy reference regarding what is and what isn't includible in calculating reportable health care costs on W-2s.

IRS adds more questions to the Form 8955-SSA Q&A

Form 8955-SSA replaced the Schedule SSA attached to the Form 5500.  The deadline for the  first filing of the new form recently passed. Based on the new questions and answers, it appears that people are having trouble obtaining the data to complete the Form 8955-SSA.  Here is an abbreviated version of the latest Q&A:

What should I do if I missed the filing deadline? Answer - submit your form as soon as possible.
Am I required to remit payment for penalties? Answer - no, we will contact you if a penalty is assessed.
Is there a delinquent filer program for late filers? Answer - not at this time.


Let's hope the IRS will be very lenient.

IRS issues new guidance on W-2 reporting

The Affordable Care Act required informational reporting of the aggregate cost of employer sponsored group health plan coverage beginning with 2012 W-2s issued in January 2013 (ErisaALERT 2011-5 and ErisaALERT 2011-14). The IRS provides new guidance in Notice 2012-9 which restates and supersedes previous guidance. In this latest Notice, the IRS clarifies some of the Q's and A's in Notice 2011-28 and adds new Q's and A's. The changes are summarized in the introduction to the Notice. Read ErisaALERT 2012-02 for more information.

IRS posts FAQ regarding deferred vested benefit statement

The IRS has a long standing requirement to provided a benefit statement to participants who terminated and were reported on the Schedule SSA attached to the Form 5500.  The Schedule SSA has been replaced by Form 8955-SSA which requires plan sponsors to indicate whether or not the statement was provided to the participant (question 8).  There has been a flurry of discussions regarding how plan sponsors should answer that question.  The new FAQ should provide some comfort to plan sponsors and is reproduced below.

What are the requirements for answering “yes” to question 8 on Form 8955-SSA? Question 8 on Form 8955-SSA asks whether the plan administrator provided an individual statement to each participant required to receive a statement. The instructions to the Form add that the plan administrator must, before the expiration of the time for the filing of the Form, furnish to each affected participant a statement setting forth the information required to be contained in the Form. May the plan administrator satisfy this requirement by using other notices such as benefit statements and distribution forms? Also, does this mean that the plan administrator must furnish a notice that includes all of the information on the Form 8955-SSA? A plan administrator may answer “yes” to question 8 if the required information was timely furnished to participants in other documentation such as benefit statements or distribution forms. A separate statement designed specifically to satisfy this requirement is not required.  A plan administrator may answer “yes” to Question 8 if the statements or other documentation issued to the participants include the following information: Name of the plan Name and address of the plan administrator Name of the participant Nature, amount, and form of the deferred vested benefit to which such participant is entitled. Thus, for purposes of completing Form 8955-SSA, the plan administrator’s notice to the plan participant does not need to include the participant’s social security number, the codes on page 2 of the Form 8955-SSA used to identify previously reported participants, or any information regarding any benefits which are forfeitable if the participant dies before a certain date.

Informational Copies of the 2011 Form 5500 Released

Advance informational copies of the 2011 Form 5500 annual return/report and related instructions were released yesterday. Information copies of the forms, schedules and instructions are available online at www.efast.dol.gov. These advance copies of the 2011 Form 5500 are for informational purposes only and cannot be used to file a 2011 Form 5500 annual return/report. Filers should monitor the EFAST website for the availability of the official electronic versions for filing using EFAST-approved software or directly through the EFAST website.

Modifications to the Form 5500 and Form 5500-SF for plan year 2011 are described under "Changes to Note" in the 2011 instructions, including:

• The actuarial schedules (Schedule MB and Schedule SB) have been updated to reflect provisions of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (“PRA 2010”).
• The instructions are updated to include the information in the EFAST2 Frequently Asked Questions explaining when a service provider who manages the filing process for the plan can get EFAST2 signing credentials and submit the electronic Form 5500 for the plan.
• The Schedule C instructions are updated to advise that for a multiemployer or multiple-employer plan, where the “plan sponsor” is the joint board of trustees for the plan, payments by contributing employers, directly or through an employer association, or by participating employee organizations, should be treated the same as payments by a plan sponsor.
• The Schedule I and Form 5500-SF instructions are updated to advise that for plans with fewer than 100 participants at the beginning of the plan year, any amount deposited with or repaid to such plan not later than the 7th business day following the day on which such amount is received by the employer or on which such amount would otherwise have been payable to the participant in cash, shall be deemed to be contributed or repaid to such plan on the earliest date on which such contributions or participant loan repayments can reasonably be segregated from the employer’s general assets.

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IRS announces only three plans on a Form 5558 - no attachments allowed

The Internal Revenue Service will not process lists of plans attached to a Form 5558, Application for Extension of Time To File Certain Employee Plan Returns, by filers requesting an extension of time to file Form 5500 series return/reports or Form 8955-SSA returns.

If the employer maintains more than one single employer plan and the plan years end on the same date, you may file a single Form 5558 to apply for extensions to file Forms 5500 series and/or Forms 8955-SSA for up to three of these plans. Do not list more than three plans on a single Form 5558. Do not attach lists of plans to a Form 5558, they will not be processed.

Lists attached to the Form 5558 received through July 31, 2012, will be returned to the filer to submit a completed Form 5558 for all plans on the list requiring an extension. Lists received after July 31, 2012 will not be returned and will not be processed.

IRS extends deadline for Form 8928

Form 8928 must be filed by group health plans, plan sponsors or plan administrators who:

• fail to provide the required level of pediatric vaccine
• fail to comply with certain HIPAA requirements
• fail to make comparable Archer medical savings account contributions
• fail to make comparable HSA contributions 

Form 7004 must be filed to obtain the extension. This reporting requirement was effective January 1, 2010.

More information regarding Form 8928 can be found at the IRS website.

IRS issues revised Form 5558

The IRS issued Form 5558 earlier this month.  Form 5558 is used to obtain a 2 1/2 month extension for filing Form 5500,  Form 8955-SSA or Form 5330. Form 5558 does not have to be signed to obtain an extension to file Form 5500 but must be signed to obtain an extension for Form 8955-SSA. The Form 5558 must be submitted on paper and mailed to Internal Revenue Service Center in Ogden, UT.

As noted in a previous post, the IRS issued the 2009 Form 8955-SSA and extended the due date for the 2009 and 2010 Form 8955-SSA to the later of January 17, 2012 or the due date that generally applies for filing the 2010 Form 8955-SSA.

ERISA Advisory Council report on Employee Benefit Plan Auditing

This past spring, the ERISA Advisory Council (the “Council”) issued a report on Employee Plan Auditing and Financial Reporting Models.  The Council studied whether the requirements of ERISA §§ 103 and 104 provide the protections to plan participants and beneficiaries as originally intended.  The Council narrowed its focus to three issues: audit and auditor quality, limited scope audits and 403(b) plan audits.  The primary findings of the Council included:

·         Some auditors require more training despite available information

·         Limited scope audits may be misunderstood

·         403(b) plans should have been granted more time to comply with the 2009 Form 5500 requirements

·         The DOL should continue educational outreach efforts

IRS issues the 2009 Form 8955-SSA and extends filing due date

The IRS has issued the 2009 Form 8955-SSA and extended the due date for the 2009 and 2010 Form 8955-SSA to the later of January 17, 2012 or the due date that generally applies for filing the 2010 Form 8955-SSA.  The 2010 Form 8955-SSA has not been issued. The January 17, 2012 due date may not be extended by filing a Form 5558.

The Form 8955-SSA is used to report information about separated participants with deferred vested benefits.  The IRC imposes a penalty for failure to file of $1 for each participant not reported  multiplied by the number of days the failure continues to a maximum penalty of $5,000.

It is important to keep in mind that the plan administrator must provide an individual statement to each affected participant. A penalty of $50 is imposed on the person required to furnish the statement to each affected participant for each willful failure to furnish the statement or a willful furnishing of a false statement.

IRS issues draft Form 8955-SSA

The IRS issued Announcement 2011-21 which designated the Form 8955-SSA as the form to use for reporting separated participants with deferred vested benefits. The IRS has released a draft of Form 8955-SSA as well as posted FAQs on their website.

Previously, Schedule SSA was used to report separated participants with deferred vested benefits until the DOL mandated electronic filing of the Form 5500. 

The Announcement indicates that the IRS has developed a voluntary electronic filing system for filing Form 8955-SSA which is ready to accept filings when the form becomes available for filing.

Form 8955-SSA has the same filing due date as the Form 5500; an extension can be obtained by filing Form 5558 which is being revised.

DOL changes DFVC filing address

Effective March 29, 2011, the address for the Delinquent Filer Voluntary Compliance Program (DFVCP) lockbox will change to: DFVC DOL, PO Box 71361, Philadelphia, PA 19176-1361. There is no overnight delivery address.

Replacement of Schedule SSA with Form 8955-SSA

In Announcement 2011-21, the IRS announced that Form 8955-SSA, a stand alone form to be filed with the IRS, is the successor to the Schedule SSA (Form 5500). Form 8955-SSA is used to report terminated participants with deferred vested benefits.

For 2009 and 2010 plan years, the Form 8955-SSA is due the later of due date for filing the 2010 Form 5500 or August 1, 2011. 

Form 8955-SSA is expected to be available shortly. The IRS has also developed a voluntary electronic filing system for filing the Form 8955-SSA which will be ready to accept filings when the form becomes available.

Extensions can be obtained by filing Form 5558, Application for Extension of Time To File Certain Employee Plan Returns.  The IRS is revising Form 5558 and expects it to be available soon.

Creditable Coverage Disclosure to CMS

If your plan provides prescription drug coverage, you must provide your Part D eligible employees a notice regarding creditable or non-creditable status of the coverage before the Medicare Part D annual enrollment period.   In addition, you must disclose to CMS whether the prescription drug coverage that is offered to a Medicare Part D eligible individual is creditable or non-creditable no later than 60 days after the beginning of each plan year or March 1, 2011 for calendar years.