Active Participants: Currently employed individuals who are covered by a plan and who are earning or retaining credited service under the plan.
Administrative Services Only (ASO) Agreement: This type of agreement is entered into with a third‑party administrator to provide claim processing for a self‑funded plan; no insurance protection is provided and the plan retains the full obligation for plan benefits.
Administrator (or Plan Administrator): The person designated by an employee benefit plan to be responsible for the operation of the plan. When the plan is silent as to that designation, ERISA provides that the plan sponsor is the “plan administrator” under ERISA.
Cafeteria Plan: A plan that allows employees to choose between taxable and nontaxable benefits; also known as a Section 125 or flexible benefits plan. Typical nontaxable benefits would include health insurance, group term life, and dental benefits.
Direct Compensation: Compensation paid directly from the plan, reported on Schedule C.
Eligible Indirect Compensation: Indirect compensation is eligible if the indirect compensation is fees or expense reimbursement payments charged to investment funds and reflected in the value of the investment or return on investment of the participating plan or its participants, reported on Schedule C. Employee Assistance Program (EAP): Employee benefit programs offered and paid for by employers, intended to help employees deal with personal problems that might adversely impact their work performance, health, and well‑being. EAPs generally include short‑term counseling and referral services for employees and their household members.
Flexible Spending Account (FSA): Cafeteria arrangement or flexible benefit plan that includes a medical expense reimbursement feature. A Form 5500 must be filed if that feature covers more than 100 participants as of the first day of the plan year.
Form 5500: Primary source of information concerning the operation, funding, assets, and investments of pension and other employee benefit plans. In addition to being an important disclosure document for plan participants and beneficiaries, Form 5500 is a compliance and research tool for the DOL and source of information and data for use by other federal agencies, Congress, and the private sector in assessing employee benefit, tax and economic trends and policies.
Health and Welfare Plan: Any plan, fund or program which was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, medical, dental, surgical or hospital care or benefits, or benefits in the event of sickness, accident Indirect Compensation: Compensation received from sources other than directly from the plan, which may include fees paid from mutual funds, common/collective funds, pooled separate accounts, or other investment vehicles in which the plan invests that are charged against the fund and reflected in the net investment return of the fund, reported on Schedule C.
Large Plan: A plan that covered 100 or more participants as of the first day of the plan year.
Nonmonetary Compensation: The value of meals, free travel, gifts, tickets to sporting events or other entertainment events, social events or parties, or other gratuities, reported on Schedule A and C.
On‑site Medical Facility: An on‑site facility that is considered an ERISA plan must either be wrapped into the employer’s existing health plan (and its reporting and disclosure) or, for a standalone plan, the employer must file Form 5500 and have a plan document, a summary plan description (SPD) and a summary annual report (SAR).
Other Retired or Separated Participants Entitled to Future Benefits: Any individuals who are retired or separated from employment, covered by the plan, and entitled to begin receiving benefits under the plan in the future.
Participant: A person is considered a “welfare benefit plan participant” for purposes of the Form 5500 if they are: A current employee who's covered by the welfare benefit plan (i.e., enrolled in benefits),. A former employee who's covered by the welfare benefit plan (i.e. those receiving COBRA, retiree medical, etc.)
Plan Sponsor (or Sponsor): Generally is one of the following (1) the employer, (2) the employee organization, or (3) the association, committee, or joint board of trustees of the parties who maintain the plan. Retired or Separated Participants Receiving Benefits: Any individuals who are retired or separated from employment (COBRA) covered by the plan.
Schedule A—Insurance Information: Intended to provide information about either a pension or welfare benefit plan’s provision of benefits or investments through the use of a contract issued by an insurance company, insurance service, or other similar organization.
Schedule C—Service Provider Information: If applicable, to list service providers who receive $5,000 or more in direct or indirect compensation as well as any terminated accounts or actuaries. Schedule C is the most complicated to prepare of the attachments to Form 5500. The DOL uses information reported on the Schedule C to evaluate whether fiduciaries are administering plans for the exclusive benefit of participants and their beneficiaries. Please note that a Schedule C is only required when the Form 5500 is funded through a trust (complex filings).
Schedule H – Financial Information: Must be attached to a Form 5500 filed for a retirement plan or funded welfare benefit plan that covers more than 100 participants as of the first day of the plan year.
Schedule I – Financial Information: Filed with Form 5500 for pension and welfare benefit plans that meet the definition of a small plan; that is, a plan that covers fewer than 100 participants as of the first day of the plan year.
Self‑Funded or Self‑Insured Plan: An arrangement under which some or all of the risk associated with providing benefits is not covered by an insurance contract. The plan sponsor establishes the necessary reserves to assure payment of claims and either self‑administers the plan or contracts with an outside administrator.
Service Provider: Persons that provide investment management, recordkeeping, claim processing, participant communication, brokerage, and similar services to the plan as part of an investment contract or transaction, are considered to be providing services to the plan and would therefore, be required to be reported on Schedule C if they receive $5,000 or more for those services during the year. Examples of Services Providers are Broker, Investment Fund Manager, Consultant/Advisor, Record‑keeper, Transfer Agent, Distributer, Trustee, and Custodian.
Small Plan: A plan that covered fewer than 100 participants as of the first day of the plan year. Note that the only time a Form 5500 is required if there are less than 100 participants is when the Form 5500 is filed as a trust filing.
Stop‑Loss Insurance: Purchased as protection from excessive claims by an individual (specific stop‑loss) or for the plan as a whole (aggregate stop‑loss). It is not a benefit to participants but is intended to limit the paid claims costs for the policyholder. Stop‑loss coverage pays for, or reimburses, the policyholder (plan or plan sponsor) for benefit payments above the predetermined limit(s) in the policy. Summary Annual Report (SAR): A report of overall plan financial information provided to each participant in a format published by the DOL. The information is derived from the Form 5500 series annual report.
Trust: A “funded” plan is one where funds are set aside in a custodial account or trust fund for the exclusive benefit of plan participants. ... Most welfare plans covered under ERISA, however, are not funded. The greater majority of welfare plans are either fully insured or partially insured through a stop-loss insurance policy.
Welfare Benefit Plan: ERISA defines employee welfare benefit plans as any plan or program established or maintained by an employer for the purpose of providing medical, surgical, or hospital care or benefits to employees and beneficiaries.
Wellness Program: Basically, a wellness program is subject to ERISA (and, thus, subject to SPD and Form 5500 requirements, etc.) when it provides medical or sickness benefits. This happens when the program goes beyond the mere promotion of good health and contains an ongoing program of physical examinations, cholesterol screening, flu shots, nutrition counseling and education, or similar benefits. However, the wellness program can be “wrapped” up with the health program.
Wrap Plan: A wrap plan is a document that bundles an employer's health and welfare plans into a single plan, while incorporating and supplementing insurance contracts, booklets and certificates and providing necessary ERISA information, overed under the wrap document. Note if there is not a wrap plan document, a separate Form 5500 must be filed for each benefit.