Form 5500

Form 5500 is the annual report an employer benefit plan files with the Department of Labor and the IRS. It discloses the plan's size, its funding, its service providers, and what they were paid. Most health plans with 100 or more participants must file; smaller fully-insured plans are generally exempt.

The form is due seven months after the plan year ends, so July 31 for a calendar-year plan, with an extension available to October 15. Late filing penalties can reach over $2,500 a day, though the Department of Labor's voluntary correction program caps them at a few thousand dollars for employers who come forward. Schedule A lists what insurance carriers received; Schedule C lists what service providers were paid, including brokers and consultants. Form 5500 filings are public, which means anyone can look up what a competitor's plan paid its vendors. Missing filings are the most common finding in Department of Labor health plan audits, usually because a company crossed the 100-participant line without noticing.

The takeaway: if your plan has 100 or more people in it on the first day of the plan year, a 5500 is due. Check that one was filed for every year you were over the line; if not, use the correction program before the Department finds it.