# ASC 965-30-25: Plan Accounting—Health and Welfare Benefit Plans — Plan Benefit Obligations — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/965/30/#25-recognition) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T02:25:15.288Z to 2026-09-10T02:25:15.288Z Record version: sha256:bea45e1d3334049ab6e944f0ea02cb6efe617a5939b8418cfa409b94edaca94b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 965-30-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/965/30/#25-recognition) SEC content: no #### Benefit Payments ##### [965-30-25-1](https://asc.understandingaccounting.org/asc/965/30/#965-30-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:25:15.288Z to 2026-09-10T02:25:15.288Z Record version: sha256:d9a4a76199c2dfb4dc2095d1b80d50fc9a7b7ccf62ab892b9af19a53cf263226 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A health and welfare plan may process benefit payments directly or it may retain a third-party administrator (for example, an [administrative service arrangement](https://asc.understandingaccounting.org/glossary/a/#administrative-service-arrangement "In an administrative service arrangement, the plan retains the full obligation for plan benefits. The plan may engage an insurance entity or other third party to act as the plan administrator. The administrator makes all benefit payments, charges the plan for those payments, and collects a fee for the services provided.")). In either case, a plan that is fully or partially self-funded is obligated for the related [benefits](https://asc.understandingaccounting.org/glossary/b/#benefits "The monetary or in-kind benefits or benefit coverage to which participants may be entitled under a pension plan or a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). Examples of benefits may include, but are not limited to, health care benefits, life insurance, legal, educational, and advisory services, pension benefits, disability benefits, death benefits, and benefits due to termination of employment."), as described in this Subtopic. #### Premiums Due under Insurance Arrangements ##### [965-30-25-2](https://asc.understandingaccounting.org/asc/965/30/#965-30-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:25:15.288Z to 2026-09-10T02:25:15.288Z Record version: sha256:88c6e4288e75905a0b8f10539fa27f0c365949a0f245b2924241282588d64506 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The benefit obligations shall include any obligation for premiums due but not paid under insurance arrangements. #### Postemployment Benefits ##### [965-30-25-3](https://asc.understandingaccounting.org/asc/965/30/#965-30-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:25:15.288Z to 2026-09-10T02:25:15.288Z Record version: sha256:de9deafd439c6838d12d6639f064973622696180e6f1f27f2fee061bd89e3dad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Plans that provide postemployment benefits shall recognize a benefit obligation for current participants, based on amounts expected to be paid in subsequent years, if all the following conditions are met: 1. a The participants' rights to receive benefits are attributable to services already rendered. 2. b The participants' benefits vest or accumulate. For example, the supplemental unemployment benefit is 52 weeks' pay if a participant worked 3 years, 78 weeks' pay if a participant worked 5 years, and 104 weeks' pay if a participant worked 7 years. In this situation, the benefits would be considered accumulating. Benefits that increase solely as a function of wage or salary increases are not considered accumulating. 3. c Payment of benefits is probable. 4. d The amount can be reasonably estimated. ##### [965-30-25-4](https://asc.understandingaccounting.org/asc/965/30/#965-30-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:25:15.288Z to 2026-09-10T02:25:15.288Z Record version: sha256:d4ca8635f2de607ca9446932c5ea68e10f3eccc56e7784e1ec18dc605b174a8b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For postemployment benefits that do not meet conditions (a) and (b) in the preceding paragraph, the plan shall recognize a benefit obligation if the event that gives rise to a liability has occurred and the amount can be reasonably estimated. For example, if all participants receive the same medical coverage upon disability regardless of length of service (the benefits do not accumulate) and the benefits do not vest, medical benefits for disabled participants shall be accrued at the date of disability and not over the participants' working lives. #### Obligation for Premium Deficit ##### [965-30-25-5](https://asc.understandingaccounting.org/asc/965/30/#965-30-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:25:15.288Z to 2026-09-10T02:25:15.288Z Record version: sha256:7440ac5ec478b5f3892c4ffa5038d7b4351e1543f07588da8ec77f2245444f56 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Experience ratings determined by the insurance entity or by estimates (for example, in [fully insured experience-rated arrangements](https://asc.understandingaccounting.org/glossary/f/#fully-insured-experience-rated-arrangement "In a fully insured experience-rated arrangement, specified benefits are paid by the insurance entity that assumes all the financial risk. Contract experience is monitored by the insurance entity. Contract experience may or may not include the experience of other similar contract holders. To the extent that benefits incurred plus risk charges and administration costs are less than premiums paid, the related plan is entitled to an experience-rating refund or dividend (see paragraphs 965-310-25-2965-310-25-3). If the total of benefits incurred, risk charges, and administrative costs exceeds premiums, the accumulated loss is generally borne by the insurance entity but may be carried over to future periods until it has been recovered (see paragraph 965-30-25-5). The related plan often has no obligation to continue coverage or to reimburse the carrier for any accumulated loss, although there are certain types of contracts that require additional payments by the plan.")) may result in a premium deficit. Premium deficits shall be included in the benefit obligations if both of the following criteria are met: 1. a It is probable that the deficit will be applied against the amounts of future premiums or future experience-rating refunds. This determination shall consider both of the following: 1. 1 The extent to which the insurance contract requires payment of such deficits 2. 2 The plan's intention, if any, to transfer coverage to another insurance entity. 2. b The amount can be reasonably estimated.