Legal Alert: September Deadlines for COBRA and 5500 Reporting

September 2021 is a busy month for compliance. Plan sponsors have obligations to meet this month, but we will focus on two in this quick alert.

COBRA Subsidy Expiration Notice and Summary Annual Report 

Due September 15, 2021

The COBRA subsidy expiration notice must be distributed no later than September 15, 2021. If the expiration notice has not been distributed yet, action must be taken today. If your COBRA is administered internally, you can access the model notice here. 

If you have contracted your COBRA obligations with a COBRA vendor, the vendor will most likely take the responsibility of distributing the expiration notice, however the actual responsibility for making sure the notices are distributed and timely remains the plan sponsor/employer’s overall responsibility.

IRS Form 5500 with Summary Annual Report (SAR) 

Due September 30, 2021

If you are a plan sponsor of a health and welfare plan that is subject to ERISA and you have 100+ participants on the plan at the beginning of the plan year, you are required to file IRS Form 5500 which is due seven months after the end of the plan year. A Summary Annual Report (SAR) is part of that 5500-filing requirement. The SAR is due nine months after the end of the plan year, so if your ERISA plan year and filing is on a calendar year basis your 5500 filing was due July 31, 2021 (unless an extension of time was filed using Form 5558) and your SAR is due September 30, 2021. The SAR distribution is made to current participants, terminated participants and COBRA individuals.

If you filed and extension using Form 5558, the SAR distribution requirement is two months after the end of the extension time to file.

Distribution of the SAR can be done electronically if the electronic delivery requirements are met. The best practice for distribution for terminated employees and COBRA participants is by first-class mail. 

The information contained herein should be understood to be general insurance brokerage information only and does not constitute advice for any particular situation or fact pattern and cannot be relied upon as such. Statements concerning financial, regulatory or legal matters are based on general observations as an insurance broker and may not be relied upon as financial, regulatory or legal advice. This document is owned by Alera Group, Inc., and its contents may not be reproduced, in whole or in part, without the written permission of Alera Group, Inc.

Updated as of 9/15/2021.