Don't HR Alone #44 - Employee Safe Driving, and Form 5500 question

July 24, 2017

 

Safe driving kit from the National Safety Council aims to drive down crashes — PRACTICE TIP

The National Safety Council released a first-of-its-kind Safe Driving Kit to help employers eliminate the number one cause of workplace deaths—car crashes. The Safe Driving Kit, sponsored by Wheels, Inc., is a free online tool built to create safer roads and protect employees through multi-media resources and engaging materials. The kit addresses the key contributors to car crashes, including distraction, alcohol, other drugs, fatigue and seatbelt use. It also brings attention to lifesaving technology that helps prevent crashes during a time when motor vehicle deaths spike in part due to summer travel.

Car crashes cost employers upwards of $68 billion in comprehensive costs every year. Workplace policies and employer engagement can help reduce crashes and promote health and wellness on and off the job. The Safe Driving Kit includes resources such as:

  • Videos;

  • Fact Sheets and FAQs;

  • Myth Busters;

  • Infographics;

  • Posters;

  • Survivor Advocate Stories;

  • Activities and ready-made communication to engage and educate employees; and

  • Links to safe driving resources.

Source: National Safety Council.

 

Form 5500

Question: Our company offers two medical plans, each with a different carrier. One of our medical plans had 45 employees enrolled as of January 1 (our plan year start date) and the other plan had 60 employees enrolled. There are 115 employees enrolled in the dental plan. If we don’t have 100 or more employees enrolled in either medical plan, do we have to include medical on our Form 5500? If the medical plan must also be included, can we combine both medical and dental on the same 5500?

Answer: Title 1 of ERISA requires certain employee health and welfare benefit plan sponsors to file a Form 5500 and any applicable schedules. The obligation applies to large plans, which are those plans with 100 or more covered participants as of the beginning of the plan year and certain small plans (those with fewer than 100 participants), including: 
 

  1. Small funded plans. “Funded” plans should not be confused with “self-funded plans.” Funded plans typically have a trust or separately maintained fund to hold plan assets. Many plans are unfunded, meaning they pay benefits from the general assets of the employer, or have been deemed unfunded under IRS Technical Release 92-01.

  2. Small plans required to file a Form M-1. The Form M-1 is required for certain multiple employer welfare arrangements (MEWAs) and entities claiming exception (ECEs). 


In this context, “participants” means employees or former employees, such as former employees who elected COBRA benefits, but does not include spouses or dependents. There are other exceptions to the Form 5500 requirement for certain large and small plans, including but not limited to, governmental plans, certain plans for select management or highly compensated employees, certain plans participating in group insurance arrangements, and apprenticeship and training plans meeting certain requirements. 

The general rule is one Form 5500 for each insurance contract; however, there are exceptions to this rule. One exception can apply when two contracts are for the same type of benefit being offered. In this case, you have two insurance contracts with two different carriers, but both are for a medical benefit. Here, the Department of Labor (DOL) would likely determine that you should combine the participants in both plans to determine whether it is a large plan. Since you had more than 100 participants enrolled in your medical benefit (combined total for both plans) as of the beginning of the plan year, then you would likely need to file a Form 5500 for your medical benefits. 

Another exception to the “one Form 5500 for each insurance contract” general rule is when an employer decides to combine all ERISA benefits into a single welfare benefit plan through a wrap document. A wrap document serves as the plan’s written plan document required under ERISA. Like other plan documents, the wrap document can specify terms of the plan not otherwise expressed in the insurance contracts, including eligibility requirements for the different benefits offered, and assists an employer with meeting its ERISA obligations. 

If an employer offers different types of benefits, such as medical and dental, and wants to bundle them into one plan, then the employer is required to have a wrap document. In this case, if you want to file a single 5500 for both your medical and dental plan, then you would need to ensure you have a wrap document in place.

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