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Are you confident that your health and welfare benefit plan financial statements and related note disclosures conform to generally accepted accounting principles? These checklists and illustrative financial statements will help you consider all the relevant requirements with a clear presentation that you can understand.
Whether you are preparing financial statements and reports for health and welfare benefit plans or auditing, reviewing, or compiling those financial statements, this practice aid can save countless research hours with its comprehensive guidance for determining the adequacy of disclosures and required supplementary information. This practice aid also provides you with illustrative financial statements and auditor's reports.
The checklists have been updated to reflect authoritative pronouncements and interpretations issued as of April 30, 2009, including:
This practice aid has been prepared by the AICPA staff and has not been reviewed, approved, disapproved, or otherwise acted on by any senior technical committee of the AICPA.
0090109
Description
.01 Employee benefit plans include defined benefit pension plans, defined contribution pension plans, and health and welfare benefit plans. Health and welfare benefit plans include plans that provide
| • | medical, dental, visual, psychiatric, or long term health care; life insurance (offered separately from a pension plan); certain severance benefits; or accidental death or dismemberment benefits. |
| • | benefits for unemployment, disability, vacations, or holidays. |
| • | other benefits such as apprenticeships, tuition assistance, day care, dependent care, housing subsidies, or legal services. |
| • | postemployment benefits such as salary continuation, supplemental unemployment benefits, severance, disability-related job training, and counseling. |
.02 Defined-benefit health and welfare plans specify a determinable benefit, which may be in the form of a reimbursement to the covered plan participant or a direct payment to providers or third-party insurers for the cost of specified services. Such plans may also include benefits that are payable in a lump sum, such as death benefits. The level of benefits may be defined or limited based on factors such as age, years of service, and salary. Contributions may be determined by the plan's actuary or be based on actual claims paid or other factors determined by the plan's sponsor. Even when a plan is funded pursuant to agreements that specify a fixed rate of employer contributions (for example, a collectively bargained multiemployer plan), such a plan may nevertheless be a defined-benefit health and welfare plan if its substance is to provide a defined benefit.
.03 Defined-contribution health and welfare plans maintain an individual account for each plan participant. They have terms that specify the means of determining the contributions to participants' accounts, rather than the amount of benefits the participants are to receive. The benefits a plan participant will receive are limited to the amount contributed to the participant's account, investment experience, expenses, and any forfeitures allocated to the participant's account. These plans also include flexible spending arrangements.
.04 Plan participants may be active or terminated employees (including retirees), as well as covered dependents and beneficiaries, of a single employer or group of employers. Employer contributions may be voluntary or required under the terms of a collective bargaining agreement negotiated with one or more labor organizations. Plans may require contributions from employers and participants (contributory plans) or from employers only (noncontributory plans). During periods of unemployment, a noncontributory plan may require contributions by participants to maintain their eligibility for benefits. Benefits may be provided through insurance contracts paid for by the plan (an insured plan), from net assets accumulated in a trust established by the plan (a self-funded plan), or both.
.05 A health and welfare plan may process benefit payments directly or it may retain a third-party administrator. In either case, a plan that is fully or partially self-funded is obligated for the related benefits.
0090109
Customer Service
Customer Service
Customer Service
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