The Form 5500 is a crucial document for employee benefit plans in the United States, particularly for health and welfare plans. Accurately determining the number of employee participants is essential for compliance with federal regulations. At Medcom, we often face a challenge: when we receive a data request, the section for plan participant counts is frequently left blank. This information is crucial when determining if an employer is required to file Form 5500.

Organizations must file Form 5500 if they maintain an employee benefit plan governed by the Employee Retirement Income Security Act (ERISA).

Plan Structure	Filing Requirements
>100 Participants	Submit full Form 5500
<100 Participants	Form 5500-SF
MEWA/Trust	Submit full Form 5500 regardless of participant count

Accurate participant counts are essential for regulatory compliance, as organizations with 100 or more participants must file Form 5500 to avoid penalties and regulatory scrutiny. These counts also facilitate effective plan management by enabling organizations to optimize their benefits offerings and make informed decisions about future plan designs. Additionally, they play a crucial role in financial accountability, affecting disclosures and funding requirements necessary for meeting fiduciary responsibilities. Lastly, understanding participant counts enhances communication strategies related to benefits, ensuring employees are well-informed about their options.

When tabulating participant counts for health and welfare benefit plans, the key term to remember is “enrolled.” A person is considered a participant if they are enrolled in the plan, regardless of whether they make contributions.

The required participant count on page two of the Form 5500 is as follows:

• Line 5: The participant count consists of enrolled (active) employees, enrolled COBRA participants, and enrolled retirees (if applicable) as of the first day of the ERISA Plan Year
• Line 6a1: The participant count includes enrolled (active) employees, excluding COBRA participants and retirees, as of the first day of the ERISA Plan Year.
• Line 6a2: The count of enrolled employees, excluding COBRA participants and retirees, is determined as of the last day of the ERISA Plan Year.
• Line 6b: The count of enrolled COBRA/ex-employees and retirees is recorded as of the last day of the ERISA Plan Year.
• Line 6c: This section is typically reserved for pension plans.

The best source for participant counts will always come from the employer, either through their enrollment counts, a benadmin system, or their TPA (Third Party Administrator).

In summary, accurate participant counts are important not only for compliance with ERISA regulations but also for the effective management and optimization of employee benefit plans. By ensuring precise reporting, organizations can mitigate risks, uphold their fiduciary responsibilities, and enhance communication with employees regarding their benefits. As the landscape of employee benefits continues to evolve, maintaining clarity and accuracy in participant counts will remain a key priority for organizations aiming to support their workforce effectively and navigate regulatory requirements with confidence.