353 / Must an employer with an accident or health plan file an information return with respect to the plan?

A plan that covers fewer than 100 employees on the first day of the plan year and is unfunded, fully insured, or a combination of unfunded and fully insured, was previously exempt from the requirement to file an annual Form 5500 report. All other plans were required to file a Form 5500.¹ Under proposed regulations issued in 2016, group health plans that were previously required to file a Form 5500 will now be required to file an additional schedule (Schedule J (Group Health Plan Information)) in addition to their previously applicable Form 5500 filing requirement. Plans that provide group health benefits to fewer than 100 participants that were exempt because they are completely unfunded, or partially insured and partially unfunded, are required under the proposed regulations to file Form 5500 without the additional Schedule J requirement. Plans that provide group health benefits to fewer than 100 participants that were exempt because they are fully insured are required to file certain answers on both Form 5500 and Schedule J.²

Note that if the plan is subject to ERISA, the Form 5500 is filed with the Department of Labor (DOL).

IRC Section 6039D requires an employer maintaining any accident or health plan to file an annual information return with the IRS for years beginning after December 31, 1988. Until the issuance of further guidance, the IRS has indefinitely suspended the reporting requirements of IRC Section 6039D.³

If in effect, IRC Section 6039D would require the reporting of the number of an employer’s employees, employees eligible to participate in the plan, employees actually participating in the plan, highly compensated employees (“HCEs”), HCEs eligible to participate in the plan, and HCEs actually participating in the plan.

The return also would report the cost of the plan, the identity of the employer, and the type of business in which the employer is engaged.⁴