Over the past year, Form 5500 has gone through changes and proposed modifications in an effort to streamline healthcare information reporting on the part of employers. The Department of Labor, The Department of the Treasury, The IRS, and the Pension Benefit Guaranty Corporation have joined forces for quality control and data mining when it comes to annual reporting. However, the American Institute of Certified Public Accountants (AICPA) has some proposed changes of their own in mind and have urged these federal agencies to get on board.
The AICPA has submitted two separate commentaries to the DOL, highlighting some of the changes reflected in the Proposed Revision of Annual Information Return/Reports along with causes of concern. The greatest concern? Confusion. Form 5500 as it stands has gone through a series of changes previously where employers have margins of error deriving from a failure to understand the form.
The AICPA fears the confusion will lead to employers to cut corners by attempting to complete the forms themselves as well as plan add-ons for employees, choose less complicated plans for employees, or reduce the plan offerings altogether. The AICPA has also taken umbrage to changes suggested for newly minted Schedules H and J, as both will require a large amount of information reporting, which is not only invasive but also labor intensive and confusing.
While a heightened effort for quality control of existing information reporting has now been implemented, the AICPA’s concerns lie primarily in the federal agencies’ demands for even more information than is necessary. For many, especially small businesses, Form 5500 is an entirely new and confusing frontier and the key is to not make that task any more daunting than it already is. The suggestion proposed by the AICPA is to hold a public hearing regarding the drafts prior to signing off on any finalized changes.
