FORM 5500

Proposed Regulations on Form 5500

Federal agencies are proposing changes to improve the Form 5500 Annual Return/Report, the primary source of information about the operations, funding and investments of private-sector, employment-based pension and welfare benefit plans in the U.S. The form is filed by private-sector employee benefit plans.

The proposed rules would apply to all ERISA-covered health plans, regardless of:

  • size
  • grandfathered status
  • whether an excepted benefit under the Affordable Care Act, and
  • whether funded with a trust, unfunded or a combination unfunded/insured. (An unfunded plan is a self-funded health plan that pays benefits as needed solely from the general assets of the employer sponsoring the plan.)

However, fully insured group health plans with fewer than 100 participants at the beginning of the plan year would be required to only answer a limited number of questions on the Form 5500 and the proposed new Schedule J.

Currently, most private employer-sponsored group health plans with fewer than 100 participants that are fully insured, unfunded or a combination of the two, do not file the Form 5500 Annual Return/Report under the current Department of Labor exemptions.

Federal agencies released the proposed regulations on July 11, 2016. If adopted, the changes generally would apply for plan years beginning on or after Jan. 1, 2019. Written comments to the proposed regulations are due to the U.S. Department of Labor by October 4, 2016.

Proposed Schedule J: Compliance Section

The compliance section of the proposed Schedule J asks:

  • whether all plan assets were held in trust, held by an insurance company qualified to do business in a state, or as insurance contracts or policies issued by an insurance company.
  • whether the plan’s Summary Plan Description and Summaries of Any Material Modifications, and Summary of Benefits and Coverage are in compliance with the applicable requirements; and
  • whether coverage provided by the plan complies with federal laws and the federal labor department’s regulations.

Non-federal governmental plans are not required to file annual reports pursuant to ERISA 103 or 104. Accordingly, any reporting required of such plans and issuers will be addressed separately by the Department of Health and Human Services in future rules or guidance.

Proposed Schedule J

The proposed Schedule J would collect information on the characteristics of the plan that is providing group health benefits, including:

  • approximate number of participants and beneficiaries covered under the plan at the end of the plan year, and the number of persons offered and receiving coverage through COBRA;
  • whether the plan offers coverage for employees, spouses, children and/or retirees; and
  • the type of group health benefits offered under the plan (for example, medical/surgical; pharmacy or prescription drug; mental health/substance use disorder treatment; wellness program; preventive care; and vision, dental or other type of benefits).

Plans that provide group health benefits are asked to:

  • Report whether one or more of the plan’s benefit package options are claiming grandfathered status under the Affordable Care Act (ACA),
  • Report whether the plan is a high deductible health plan, is a health flexible spending account (FSA) or includes a health FSA as a component, or is a health reimbursement arrangement
  • Report whether the plan received rebates, refunds, or reimbursements from a service provider
    Rebates, refunds or reimbursements refer to items such as a medical loss ratio rebate under the ACA and offset rebates from favorable claims experience. If these were received, filers would be required to report the type of service provider, the amount received and how the rebates were used (for example, returned to participants, premium holiday or payment of benefits).
  • Identify any service providers to the plan not already reported on Schedule A (Insurance Information) or Schedule C (Service Provider Information) by providing the name, address, telephone number, employer identification number, and, if applicable, the National Insurance Producer Registry number.
  • Provide the National Producer Number established by the National Association of Insurance Commissioners.
    Service providers with a National Producer Number include third party administrator/claims processors, including issuers subject to an “administrative services only (ASO)” contract; mental health benefits managers; wellness program managers; substance use disorder benefits manager; pharmacy benefit managers or drug providers; and independent review organizations.
  • Report the total premium payment made for any stop loss coverage, as well as information on the attachment points of coverage, individual claim limits and/or the aggregate claim limit contained in the policy.

For group health plans that are not required to complete a Schedule H (generally, fully insured, unfunded plans, or combination insured/unfunded plans), the proposed regulations would require that information regarding employer and participant contributions be reported on the Schedule J, including employer contributions received, participant contributions received, employer contributions receivable, participant contributions receivable, other contributions received or receivable (including non-cash contributions) and the total of all contributions. Filers would also be required to report whether there was a failure to timely transmit participant contributions to the plan.

In addition, plans that provide group health benefits are asked to report:

  • Claims payment data
    This data would include information on:
    1. How many post-service benefit claims were submitted during the plan year, and how many of those claims were:
      • approved during the plan year
      • denied during the plan year
      • pending at the end of the plan year
      • benefit claim denials appealed during the plan year
      • appealed claims upheld as denials and how many were payable after appeal.
    2. How many post-service benefit claim denials were appealed during the plan year, and how many of those appeals were:
      • Upheld during the plan year as denials
      • Overturned and approvedduring the plan year after appeal
    3. How many pre-service benefit claims appealed during the plan year were:
      • Upheld the denials during the plan year
      • Approved during the plan year after appeal
  • Whether the plan was unable to pay claims within one month of being approved for payment at any time during the plan year and, if so, the number of unpaid claims, the total amount not paid, and the number of claims not paid within three months or longer.
  • The total dollar amount of claims paid during the plan year. If the plan provides benefits through an insurance policy, filers would be required to identify any delinquent payments to the insurance carrier within the time required by the carrier, and identify whether any delinquencies resulted in a lapse in coverage.

The federal labor department is considering, in addition to the information requested in the new Schedule J, whether to require plans to report more information on denied claims, such as the dollar amount of claims that were denied during the plan year, the denial code, and/or whether the claims were for mental health and substance use disorder benefits or for medical/surgical benefits.


The penalty for failure or refusal to file a Form 5500 is a maximum of $2,063 per day, up from a maximum of $1,100 per day. The penalty became effective after August 1, 2016.