The Patient Protection and Affordable Care Act (“PPACA”) requires the Secretary of Labor to provide Congress with an annual report regarding self-insured employee health benefit plans and the employers that sponsor them. Using information obtained from the 2009 Annual Return / Report of Employee Benefit Plan (the “Form 5500”) that some employers are required to file, the data shows, among other things, that of the 50,000+ health plans that filed a Form 5500 for 2009 about 14,800 were completely self-insured and about 6,800 were selfinsured but also purchased some insurance to cover large losses.
In presenting the data to Congress, the report notes several limitations in providing the required report. First, because health plans must only file an annual Form 5500 if they have more than 100 participants or hold assets in trust, smaller self-insured plans and employers who pay benefits directly from the employers’ general assets are not included in this report. Second, because employers can report health benefits with other benefits (life insurance, disability) on the same Form 5500, the Report notes that it is very difficult to determine how the various benefits are actually being financed, resulting in estimates that are subject to “substantial uncertainty.” Third, because the Form 5500 does not collect data on plan sponsor finances (although information may be available for publically traded companies), it is presumed that the financial strength of self-insured plan sponsors varies greatly.
Based on the foregoing reporting limitations, it is very conceivable that the Form 5500 information and reporting requirements may be expanded to provide the DOL with more information and cover smaller subset of employers. Should you have any questions on the DOL’s report or the Form 5500 reporting requirements, please consult your relationship attorney.