Two options are available for this situation:
Option 1 consists of establishing a wrap-around plan with a plan year that correlates with the Company’s fiscal year, such as 1/1 through 12/31 or one of the contract years. Although the insurance contracts can still use different dates, if the plan files a Form 5500 and has 100 participants, the insurance carrier will need to furnish premium information for the plan year instead of the contract year, when filing said Form 5500. You can also ask the carriers to run out the short year and place future years on a plan year basis.
Option 2 involves creating separate plans/SPDs for every benefit. With this option every benefit would have a separate plan number, for example Medical/Rx-501, Dental-502 etc. The Plan Year for each plan would then coincide with the insurance contract year. Any plans with 100 participants would require filing a Form 5500 based on the plan year but the insurance contract would match the plan year.
The first option provides some advantages, such as only being requiring one Form 5500 filing, so long as the plan reaches 100 participants and all the information can be in a single document. Another advantage is that the plan year matches the company’s fiscal year, any extension of the corporate tax return automatically applies to the form 5500. The tax deduction would coincide with the company’s fiscal year, if the insurance contracts were to be altered to match the plan year. There is no definitive answer, especially if it’s a small plan that will likely never have 100 participants. It is allowed for the plan year and insurance contract to be different, but if required to file a Form 5500, the insurance information will need to be reported based on the plan year. Basically the plan year determines how and when the Form 5500 is filed and what information is pertinent.