The DOL reports that over 200,000 filings are received per year. In the most recent, complete year of filings, EBSA received about half of plan filings by the calendar plan-year deadline (July 31) and nearly 90% by the calendar plan-year extension deadline (October 15). With half of businesses missing this deadline, their business can be put in a position where penalties may occur. But what can be done so a business is never late for this important date? Let’s take a look at the BASE® 5500 Solver and how it can be used to meet this annual deadline.
What are the Form 5500 Series and schedules?
The Form 5500 Series is an important compliance, research, and disclosure tool for the Department of Labor (DOL). The forms are part of ERISA’s overall reporting which assure that employee benefit plans are operated and managed in the way they were intended, including providing access to sufficient information to protect the rights and benefits of the covered participants under the employee benefit plans.
Who is required to file?
Employers with 100 or more employees participating in any health and welfare benefit plans are required to file and helps them to easily prepare and file the 5500 Series forms and schedules electronically each year. This comprehensive compliance solution generates custom compliant documents that are used to report important information regarding employee health and welfare benefit plans.
*Disclaimer – under certain circumstances, there may be a Form 5500 required for businesses under the 100-employee mark. Always ask questions, do your research, and make sure your business is not late for filing the specific form.*
What is the deadline?
For health and welfare benefit plans that end with the calendar year, the Form 5500 is due by July 31 of the following year.
What are some reasons as to why businesses miss the filing?
Employers with employee retirement plans are very familiar with the Form 5500 filing requirement, while many employers are unaware that the Form 5500 filing requirement may also exist for their health and welfare plans. Overall, there are 5 reasons as to why plan sponsors miss the filing of Form 5500 deadline:
- Ignoring emails from a service vendor
- Doesn’t start early enough to meet the deadline
- Starts, but stops because they aren’t sure how to fill out the forms
- Has their own plan and doesn’t know they need to file Form 5500
- Just good old breakdown of communication
What are the penalties?
If a business is late, and does not file before their designated deadline, they will be eligible for steep penalties. The IRS penalty is $25 per day, up to a maximum of $15,000. The IRS penalty for late filing of a 5500 series returned is $250 a day, up to a maximum penalty of $150,000 per plan year.
What can a business do to avoid missing the deadline?
Get help from a third-party administrator, like BASE®, to eliminate the reasons as to why so many businesses miss the filing and, in result, receive penalties. With BASE®, all Form 5500 Services, data and forms, will be electronically stored with a simple filing process that can help employers prepare and file electronically. All workflow is tracked, including signature status, and tracking of submission to and the acceptance by the DOL, and all administrative procedures are handled by BASE®, helping plan sponsors have peace of mind.
BASE® is helping business owners ensure they aren’t late for the very important Form 5500 filing date. Contact BASE® for more information on the BASE® 5500 Solver at 888.386.9680 or visit www.BASEonline.com.