We are quickly approaching the most wonderful time of year. If you were thinking snowmen, chestnuts roasting on an open fire, and twinkle lights, then you likely don’t have a calendar year ERISA plan. For the rest of us, Christmas is in July! With the joys of 4th quarter renewals behind us, we can now focus on preparing for the 5500 busy season.
As such, you are likely receiving several emails from insurance carriers with Schedules for the various plans offered by your clients in the 2022 Plan Year. These Schedules are most likely consisting of Schedule As and Schedule Cs. It is also likely that there may be some questions in your mind as to when to expect or request a Schedule A or C. What purpose does each one serve, what lines of coverage do they cover, and when should they be included? All valid questions and ones for which we are happy to provide guidance.
Schedules A & C are the most common reporting schedules for the Form 5500. Providers prepare them as a uniform manner to report carrier-specific information (name, EIN, NAIC, etc.), the lines of coverage provided, the number of participants, applicable service fees incurred under the coverage, commissions paid to brokers, as well as premiums and claims that were paid. Depending on the funding type of the specific line of coverage, you will receive either a Schedule A or a Schedule C. Below, we break down the differences between them and the types of plans that will require them.
Issued by the carrier if the benefit is Fully Insured (premium based). Schedule As report the total premiums during the coverage period, any commissions or bonuses that were dispersed from the carrier to the brokers, and list the benefit offered and the number of participants.
Stop Loss Contracts
Schedule A is generally not required for reporting on the 5500. However, in the event the stop loss is for a trusted benefit subject to ERISA, it is to be included.
Issued by the provider/carrier if the benefit is self-insured and service carrier fees were paid by the Plan Sponsor. Schedule C provides details on any fees associated with the plan. These fees reported could be paid on behalf of the Plan to service providers, such as brokers and administrators. Schedule Cs are not required to be included for Self-Insured plans unless it is reporting fees of $5,000 or more paid out of a trust using assets of the Plan Sponsor and provided to the Plan.
Level Funded Plans
These are considered self-insured for filing purposes. There may be instances where a Schedule A and Schedule C are received from the carrier. If the carrier provides information for Medical, it should appear on Schedule A instead of Schedule C.
In short, if you have fully insured benefits subject to ERISA, it will be reported on a Schedule A and is required to be included on the 5500 Filing. Self-insured Plans and Level Funded Plan benefits are reported on Schedule Cs though inclusion on the 5500 Filing is contingent on whether the benefits are funded through a trust paid for with Plan Sponsor assets. As always, Medcom Benefit Solutions is here to help with your Form 5500 Filing needs, so do not hesitate to contact us if you have any questions!