Proposed Changes to 5500s

18 July 2016

Proposed Changes to 5500s

The Department of Labor (DOL), the Internal Revenue Service and the Pension Benefit Guarantee Corporation have proposed revisions to the Form 5500, effective with the 2019 Plan Year. The proposed rule includes a proposal that all group health plans, including small insured and self-funded welfare benefit plans, would need to file the Form 5500, instead of only those with 100 or more participants, as under current regulations.

The updated and expanded Form 5500 would add a new Schedule J for group health plans. Schedule J would require extensive information on the characteristics of plans that provide group health benefits, including:

  • An estimate of the number of covered participants and beneficiaries covered under the plan at the end of the plan year
  • Whether the plan offers coverage for employees, spouses, children, or retirees
  • What type of group health benefits are offered under the plan
  • Whether the plan is funded through a health insurer and whether benefits are paid through a trust or from an employer’s general assets
  • Whether there are participant or employer contributions
  • Whether the plan received rebates, refunds, or reimbursements from a service provider, such as, a medical loss ratio rebate under the Affordable Care Act (ACA) or offset rebates reflecting favorable claims experience, including:
    • the type of service provider
    • the amount received
    • how the rebates were used
  • Total premium payments for stop loss coverage, and information on the attachment points for this coverage, individual claim limits and the policy’s aggregate claim limit

Schedule J would also request claim payment data, including information on how many claims were submitted, approved and denied during the plan year. Schedule J would also require reporting of:

  • How many benefit claim denials were appealed during the plan year
  • How many appealed claims were upheld as denials and how many were payable after appeal
  • Whether any claims for benefits were not adjudicated within the required timeframes

Plans would also be asked to report:

  • Whether the plan was unable to pay claims at any time during the plan year (and, if so, the number of unpaid claims)
  • The total dollar amount of claims paid during the plan year
  • For insured plans, any delinquent payments to the plan’s insurer within the time required by the insurer (and whether any delinquencies led to lapses in coverage)

The DOL is also considering requiring additional information on denied claims, such as the dollar amount of denied claims during the plan year and related denial codes and types of claims denied.

Schedule J would also ask group health plans to identify any plan service providers (that are not otherwise reported on Schedules A or C) by providing the name, address, telephone number and employer identification number. These service providers would include claim processors, pharmacy benefit managers and other organizations.

Schedule J also would require compliance information from plans that provide group health benefits, including:

  • If 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 plan assets were not held in trust based on reliance on the DOL’s nonenforcement policy under Technical Release 92-01
  • Whether the plan’s summary plan description, summaries of material modifications and summaries of benefits and coverage comply with governing content requirements
  • Whether the plan is compliant with various group health plan mandates, including:
    • the Health Insurance Portability and Accountability Act of 1996
    • the Genetic Information Nondiscrimination Act
    • the Mental Health Parity Act of 1996
    • the Newborns’ and Mothers’ Health Protection Act of 1996)
    • the Women’s Health and Cancer Rights Act of 1998
    • Michelle’s Law
    • the ACA

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