It is a 12-month period, for which benefits are being paid under the plan. For most plans, the period selected will be either a calendar year or the tax year of the plan sponsor/company. Due to the fact that the benefits usually represent a tax advantage of some sort, it’s convenient to have the plan match the company’s tax year, in doing so, there’s also the added advantage that the plan can use any corporate tax extension for filing the Form 5500.
Nevertheless, a plan year can be any 12-month period, and need not necessarily begin in January. If benefits are fully-insured, the plan year is ideally the term of the insurance contract. When creating a wrap plan that includes multiple insured benefits that have different contract years, one single plan year must be selected. Information for the Form 5500 (via Schedule A) is based on the plan year you specify rather than the contract year, and the insurers must provide the information