For employers overseeing employee benefit plans, complying with Form 5500 filing requirements is essential to avoid significant penalties. Here's a quick guide to understanding deadlines and extensions, along with some tips on staying compliant.

Form 5500 must be filed by the last day of the seventh month following the end of the plan year. If this date falls on a weekend or federal holiday, the deadline is extended to the next business day. Therefore, for calendar-year plans, the deadline is July 31.

What Happens if You Miss the Deadline?

Failing to file, late filing, or submitting incomplete/deficient filings can result in steep penalties ranging from $1,100 to $2,670 per day. There is no statute of limitations on these penalties, and plan administrators can even face criminal liability for ERISA violations.

Are you panicking yet? It’s okay, there are a few options for extending the deadline…

• Form 5558 Extension - Provides a 2.5-month extension
• Automatic Extension - Extends the filing due date in accordance with the employer’s tax filing extension (only if plan year is identical to employer’s fiscal year)  
• Special Extension - Granted by the DOL and IRS for employers impacted by natural disasters (extension varies)
• Delinquent Filer Voluntary Compliance (DFVC) Program - Reduces penalty amounts for late filings

Delinquent Filer Voluntary Compliance Program (DFVC)

The DFVC Program offers a lifeline for late filers, significantly reducing penalties if the plan administrator acknowledges the failure, agrees not to dispute the penalty, and voluntarily submits all filings. This program can reduce daily penalties to $10 per plan with caps of $2,000 annually and $4,000 overall per plan.

Tips on Late Filing

• Filing Retroactively: Try to file as far back as you can reasonably determine that a filing may have been due The most recent three years must have complete information, but the DOL can accept if a “good faith effort” is made to obtain all the data.
• Consolidating Filings: Use a Wrap Document to consolidate plans and manage penalties more effectively.
• Reasonable Cause for Late Filing: If you miss a deadline, you can claim "reasonable cause" by filing late, submitting a statement within 30 days, and proving mitigating factors beyond your control caused the delay.

Action Steps to Stay Compliant

• Discover opportunities on http://efast.dol.gov
• Stay on top of tracking your clients’ filing deadlines
• Start preparing filings early
• Partner with a reliable compliance advisor like Medcom!
• Monitor first-day participant counts for all ERISA welfare plans
• Distribute the Summary Annual Report (SAR) to participants within two months after the filing due date

Staying ahead of Form 5500 deadlines is essential not only to avoid penalties but also to protect your business's stability and integrity. By being proactive, utilizing extensions, and leveraging tools like the DFVC program, you're not just adhering to regulations; you're shielding your clients from potential risks. Remember, compliance is not a one-time task; it's an ongoing commitment. Take control of your filings by letting Medcom handle the complexities, ensuring a smooth process. Take control of your filings by letting Medcom handle the tough stuff, ensuring smooth sailing. For more information, request a proposal or contact sales@medcombenefits.com.