ERISA Pros to Prepare Wrap SPDs & File Form 5500 Electronically for Welfare Benefit Plans

ERISA Pros will begin offering Form 5500 preparation & electronic online filing services for Health & Welfare Benefit Plans using the Department of Labor’s (DOL) EFAST2 system. Employers must file all Plan Year 2009 and later Form 5500 Annual Returns / Reports electronically. This new requirement will not only make it easier and faster for employers to file Form 5500, but also for the DOL to monitor compliance and enforce penalties. Employers can face DOL penalties of $1,100 per Plan for each day it files Form 5500 past the deadline.

Atlanta, GA (Vocus/PRWEB ) October 7, 2009 -- ERISA Pros, LLC has announced its plans to prepare and file annual Form 5500s electronically for its customers’ Health & Welfare Benefit Plans utilizing Department of Labor (DOL) approved software through the DOL’s EFAST2 system. Under the DOL’s Final Rule on Annual Reporting and Disclosure, all Plan Year 2009 and later Form 5500 Annual Returns / Reports must be filed electronically.

An employer sponsoring four separate Plans (e.g., a life, medical, dental, and disability plan) that files a Form 5500 for each Plan just 30 days late could face a DOL penalty of $132,000!

There are numerous types of ERISA Health & Welfare Employee Benefit Plans and other fringe benefits, and the list continues to grow. The most common ones are employer sponsored group life, medical, dental, and disability insurance policies; however many fringe benefit plans that do not utilize insurance products, such as Severance Pay Plans, are also subject to ERISA. Almost every employer, regardless of its size or number of employees, must comply with ERISA. The only exceptions are church and government plans.

One requirement of ERISA is for employers to report certain information concerning the financial condition and operations of their Plans annually to the DOL on Form 5500. Employers must also disclose a summary of their Form 5500 to their Plan Participants in a Summary Annual Report (SAR). There is a “small plan” exception to this requirement for employer sponsored Plans having fewer than 100 Participants on the first day of the Plan Year. Under certain circumstances, an unwary employer could lose its small plan exemption and be required to file a Form 5500. A more comprehensive explanation may be found at Form 5500 Annual Reporting Requirements.

The DOL’s new requirement that Form 5500s be filed electronically will not only make it easier and faster for employers to file, but also for the DOL to monitor compliance and enforce penalties. Rather than relying on random audits or participant complaints to initiate an investigation of an employer’s compliance with ERISA, the DOL will be instantly alerted if numbers on a Form 5500 are inconsistent or if the form is incomplete or not prepared and filed at all. The DOL will also be able to perform additional checks on the Form 5500, such as the reasonableness of information provided.

Employers can face a DOL penalty of $1,100 per day for filing its Form 5500 past the deadline and $110 per day penalty for delivering its SAR beyond its deadline. The deadline for a Plan’s Form 5500 is 7 months after the end of the Plan Year and 9 months for the SAR. According to ERISA attorney and founder of ERISA Pros, Bernard Kearse, JD, LLM, “An employer sponsoring four separate Plans (e.g., a life, medical, dental, and disability plan) that files a Form 5500 for each Plan just 30 days late could face a DOL penalty of $132,000!” ERISA Pros has prepared a short and humerous movie about DOL penalties, "The ERISA Force."

In 2008, enforcement of ERISA laws resulted in $1.2 billion. Hilda Solis, the new Secretary of Labor in the Obama Administration, has stated that she is committed to protecting workers' benefits and expects to hire about 1,000 new employees, including 670 investigators. In addition to avoiding onerous penalties, an employer has many additional reasons to comply with ERISA.

Many of the nation's 5+ million employers are not in compliance with ERISA because they are not aware that their group insurance policies and other Welfare Benefit Plans are subject to ERISA, just as their 401(k) plans are. In addition to a general lack of awareness, a common misperception is who is responsible for preparing and filing Form 5500s. Most employers believe their insurance broker, insurance carrier, accountant, or legal advisor is taking care of this. However, ERISA compliance is solely the employer's responsibility. Misperceptions such as these can make for very unhappy employers if the DOL knocks on their door before their insurance broker or other advisors alert them to this potential problem. ERISA Pros will partner with those advisors, helping advisors cement their relationship with clients, avert potential legal problems, and reduce competition from other advisors who provide ERISA compliance services.

ERISA Pros plans to distinguish itself by providing proactive and ongoing compliance. Its experienced professionals will personally obtain the information to prepare documents for its client--rather than giving a blank template to an employer, which would likely be incomplete, completed incorrectly, or perhaps never completed. Additionally, ERISA Pros will contact its customers annually to assess whether their SPDs are still in compliance, and, if not, prepare the necessary documents to help get them back into compliance.

ERISA Pros' proprietary "Wrap-Tight" sm wrap SPD allows all of an employer's ERISA Plans to be consolidated into a single Plan. A wrap SPD saves an employer the time and expense of preparing an SPD and a Form 5500 for each separate Plan.

About ERISA Pros:
ERISA Pros provides ERISA compliance solutions for Health & Welfare Benefit Plans, including Plan Documents, Summary Plan Descriptions (wrap SPD), and Form 5500 preparation and electronic filing services . For a complimentary ERISA compliance evaluation or for additional information on ERISA Pros, its “Wrap-Tight” sm wrap SPD, or Form 5500 preparation and electronic filing, contact Bernard Kearse.

Contact:
Bernard V. Kearse, III, JD, LLM
ERISA Pros, LLC
Suite 800; 990 Hammond Dr. NE
Atlanta, Ga. 30328
678-443-4003 (local)
866-488-6582 (toll-free)

form 5500 preparation electronic filing deadlineerisa compliancegroup insuranceefast2welfare benefit planserisa proswrap spddol penaltiesemployee fringe benefits

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