Filed Under:Markets, Employee Benefits

Labor wants small health plan sponsors to file annual returns

Fully insured small employers would have to fill out parts of Form 5500 and a new group health schedule

Officials say they want information about plan demographics, service providers and stop-loss arrangements. (Photo: Thinkstock)
Officials say they want information about plan demographics, service providers and stop-loss arrangements. (Photo: Thinkstock)

The U.S. Department of Labor wants to use major changes to the Form 5500 benefit plan annual return program to get more information about U.S. group health plans.

The DOL said Monday in a public statement that it wants to eliminate current Form 5500 filing exemptions that help most employers with fewer than 100 participants in fully insured health plan — and many with fewer than 100 participants in self-insured, or partly self-insured, health plans — avoid filing returns for those plans. 

The department also wants to create a new Form 5500 attachment, Schedule J, that would seek information about an employer's group health plan.

Even very small employers with fully insured plans would have to provide information about the enrollees, the plan administrators and other service providers, claims and stop-loss insurance arrangements. Small employers that offer retiree-only plans, plans that claim "grandfathered status" under the Affordable Care Act, and the kinds of small self-insured plans that are now exempt from Form 5500 filing requirements would also have to answer some questions on Form 5500 itself and the new Schedule J, officials say in a packet of documents posted on the website of the Employee Benefits Security Administration, the DOL arm that oversees employee benefit plans. 

The DOL developed one set of draft regulations on its own and a second together with the Internal Revenue Service. The DOL and the IRS estimate in an analysis of the effects of one set of regulations that it could increase the number of small fully insured group health plans that file Form 5500 reports to about 1.9 million, from none today.

The proposal could increase the number of "other health plans" filing Form 5500 reports, which appears to include some types of small self-insured health plans, to 289,000, from 6,200 today.

The DOL and the IRS estimate filing Form 5500 reports would cost a typical small employer an average of about $100.

Officials say  in the preamble to the regulations developed with the Internal Revenue Service that they are conscious about what the U.S. Supreme Court said in a recent ruling on Gobeille v. Liberty Mutual Insurance Company.

Related: Gobeille v. Liberty Mutual: Supreme Court justices question Vermont's self-insured plan data call

In that ruling, the court blocked state efforts to collect information from self-insured plans, because of a provision in the Employee Retirement Income Security Act of 1974 that blocks states from regulating large employee benefit plans. The court held that states should ask the Labor Department to collect any information states or other parties need from the kinds of self-insured health plans protected by the ERISA preemption provision.

The department is preparing to publish one major batch of draft regulations connected with the proposal in the Federal Register July 21, and another batch, which was developed together with the Internal Revenue Service, on that same date.

Comments on both sets of draft regulations are due Oct. 4.

The department lists Mara Blumenthal and Suzanne Bach as its contact people for the proposal, and Steven Klubock as an IRS contact.

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Nichole Morford

Nichole Morford
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