Do You Need to File a Form 5500 for a Cafeteria Plan?

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The short answer is no, you don’t file a Form 5500 for the cafeteria plan itself. But you might have to file one for the specific benefits inside it.

Think of a cafeteria plan (a Section 125 plan) like a shopping cart. The cart itself doesn’t trigger tax or reporting rules—but the items you put inside the cart might.

Here is how it works in three simple steps.

1. The “Shopping Cart” is Free (The IRS Rule)

A cafeteria plan is just a tax structure that lets employees buy benefits using pre-tax dollars. The IRS suspended the rule requiring a Form 5500 for the plan structure itself. So, you can cross the cafeteria plan itself off your filing list.

2. Check the “Items” Inside (The DOL Rule)

While the cart is exempt, the Department of Labor (DOL) cares about the actual benefits you are funding through it. These are called component plans.

You need to look at each individual benefit you offer pre-tax, such as:

  • Your group health insurance plan
  • A Health FSA (Flexible Spending Account)
  • Dental or vision insurance
3. The “Under 100” Rule (Who actually has to file?)

Most small businesses don’t have to file a Form 5500 because of a size exemption.

  • If you have FEWER than 100 participants: You usually do not have to file a Form 5500 for your benefits, as long as they are paid out of the company’s general bank account or through an insurance company.
  • If you have 100 or MORE participants: You must file a Form 5500 for that specific benefit (like your main health insurance plan).

> Note: “Participants” usually means employees signed up for the plan on the very first day of the plan year. You do not count their dependents (spouses or kids).

Summary Checklist for HR
  • Count your heads: Did any of your pre-tax benefits have 100 or more employees enrolled on day one of the plan year?
  • If NO: You are likely exempt from filing a Form 5500 entirely.
  • If YES: You must file a Form 5500 for that specific benefit plan. You’ll do this electronically using the government’s online system, called EFAST2.

Pro-Tip: If you do have over 100 employees, ask your insurance broker about a “Wrap Document.” This combines all your different benefits into one single bundle so you only have to file a single Form 5500 instead of three or four separate ones.

Source: Thomson Reuters