Form 5500 Due Dates and Penalties
Welfare benefit filing is due 7 months after your plan year ends.
(For example, if your plan year ended on 12/31, you would need to file your 5500 by 7/31 of the following year.)
If you are not able to file your 5500 by the deadline, you can request a 5558 extension that gives you an additional 2.5 months to file. NOTE: This extension must be mailed to the IRS before the original deadline.
If you are late or have never filed a 5500, there are certain penalties that will be assessed:
5500 Form Late Filing Penalty
Late filers of Form 5500 can be penalized by the IRS and the DOL.
The IRS imposes a $250 per day late penalty with a maximum of $150,000.
The DOL imposes a $2,452 per day penalty with no maximum cap on the amount you can be charged.
However, there is some relief for late or delinquent filers. The DOL has instituted a Delinquent Filer Voluntary Compliance Program (DFVC). This program allows late or delinquent filers to self-report and pre-pay their penalties. Doing so can significantly decrease the penalties paid.
Instead of the above penalties, all penalties are lumped into one fine. The rate drops to $10 per day with a per plan year cap of $2000 and a total payment cap of $4000.
Summary Annual Report (SAR)
Employers who are required to file a Form 5500 for their sponsored health plan must distribute a Summary Annual Report (“SAR”) to plan participants within nine months after the end of the plan year or two months after filing of Form 5500 if a filing extension was granted. A SAR stands for Summary Annual Report.
The SAR must be provided to each plan participant, including COBRA participants and terminated employees covered under the plan, during the applicable plan year. The SAR can be distributed by hand delivery, U.S. mail, or electronic delivery.
Employer group welfare plan Form 5500 filing and SAR required:
- The plan is fully insured and has 100 or more participants on the first day of the plan year.
- The plan is self-funded and uses a trust regardless of how many participants there are.
- The plan is self-funded and relies on the Section 125 plan exemption if it has 100 participants on the first day of the plan year.
Exemptions to Form 5500 and SAR filing:
- Church plans that are defined under ERISA Section 3 (33).
- Governmental plans, including tribal governmental plans.
- Top-hat plans that are unfunded or not insured and only benefit a select group of management or highly compensated employees.
- Small insured or unfunded welfare plans (A welfare plan with fewer than 100 participants at the beginning of the plan year is not required to file an annual report if the plan is fully insured, entirely unfunded, or a combination of both.)