Health and welfare plans subject to ERISA's Form 5500 reporting requirements (generally, plans with 100 or more participants) must report certain information to the DOL. For plans with fully insured coverage, this reporting obligation includes specific information about each insurance policy using the form's Schedule A ('Insurance Information').
Insurers are statutorily required to provide Schedule A information to plans, and although most insurers generally do so, mistakes, miscommunications, and other issues can sometimes result in plan administrators not receiving the information they need to complete the Form 5500 as the filing deadline approaches.
Importantly, plan administrators remain responsible for filing Schedule A even if they lack the information to do so. While plan administrators can report an insurance company's failure to provide the necessary information on Schedule A's Part IV, this should be a last resort undertaken only after all reasonable efforts have been made to obtain the information.
Before assuming that an insurance company didn't send any Schedule A information, plan administrators should first ensure that the information wasn't simply misidentified, misfiled or otherwise misplaced. Insurers may (and often do) deliver their Schedule A information electronically, and it is not uncommon to find Schedule A information delivered to the wrong person or department, diverted to 'junk' or 'spam' email folders, or simply buried unopened in an inbox because the recipient didn't recognize it. (There is no standard format for Schedule A information and carriers' approaches vary widely.)
If the above approach doesn't yield any results, the plan administrator should contact the insurance company to see if there's been an oversight. This usually solves the problem, as the insurer can tell the plan administrator where they sent the information, or just simply send it again.
Sometimes, however, plan administrators will discover that insurance companies really didn't send any Schedule A information, and the plan administrator will need to know why.
A few of the more common reasons insurers have for not sending out Schedule A information are:
- The insurance policy year has not ended: Plans sometimes include insurance policies with policy years that differ from the plan year. For instance, a plan that runs from July 1 to June 30 may have an insured benefit with a calendar year policy year. If so, the insurer may not have any Schedule A information to provide because its policy year hasn't concluded. (The plan administrator may nevertheless want to check for Schedule A information for the previous policy year (if any), since Form 5500 reporting should include Schedule A's for any insured benefits with policy years ending within the applicable plan year.)
- The insurer thought the plan was a small plan: Sometimes plans with insured benefits covering fewer than 100 participants must still file Form 5500 for those benefits (usually because those benefits are offered through a wrap plan alongside other benefits covering 100 or more participants). Plan administrators may have to proactively request Schedule A information because these insurers assume that the plan is exempt from the Form 5500 requirement.
- The plan hadn't needed Schedule A information in the past: Insurers that hadn't provided Schedule A information in the past because the plan had not needed it (usually because the plan had truly been a 'small plan') may continue to withhold it even if its own benefit surpasses 100 participants, usually because of operational lag or another form of administrative inertia.
If, after conferring with the insurer, the plan administrator determines that no Schedule A information is necessary (e.g., the policy year did not end until after the reportable plan year or other appropriate reason), no further action is required.
However, if the plan administrator does determine that Schedule A information is necessary (e.g., because the insurer's 'small plan' is just one component of the plan administrator's 'large plan'), then the insurer should provide that information to the plan administrator as soon as practicable.
If absolutely necessary, a plan administrator can ask the local DOL office to intervene and, if all else fails, the plan administrator should answer 'Yes' on Schedule A, Part IV, Line 11 ('Did the insurance company fail to provide any information necessary to complete Schedule A?') and explain on Line 12 in detail the information that the insurer failed to provide. This will fulfill the plan administrator's obligation to complete Schedule A despite the insurance company's failure to provide the information to do so.