The Federal Employee Retirement Income Security Act (ERISA) requires employers to provide Summary Plan Descriptions (SPDs) to all employees who participate in retirement plans and group health benefit plans. The WRAP plan and Summary Plan Description identify the benefits provided by the program and provide employees with detailed information outlining how the plan works. This document must explain when employees are able to become eligible to join the plan, how their benefits are calculated, how they can claim benefits, and when they become vested.
Benefits Of A Wrap Document
Due to the amount of time organizations must dedicate and the knowledge required to complete these documents successfully, an effective solution to these reporting requirements is a wrap document.
Wrap documents are customized documents that “wrap” around current plan documents and provide a summary plan description to comply with ERISA. The benefits that are available under the plan will continue to be governed by the insurance policy, plan booklet, or coverage certificate, but a wrap document supplements it with the information needed for ERISA compliance.
With that being said, many regulations govern the composition and distribution of summary plan descriptions and wrap documents. The eBen employee benefits consultants have the knowledge and experience to help organizations navigate this complex area of compliance.
Our SPD And Wrap Plan Services
We will ensure your summary plan description contains all the required information, including:
- Your benefit plans and how they work
- Employee eligibility requirements for plan participation, including minimum ages and service requirements
- The plan year’s beginning and end dates
- Benefits calculation and disbursement
- Plain language that is easy for employees to understand
- The employer’s name and address
- Name and contact information for the plan administrator
- The name of the plan and its assigned number by the Internal Revenue Service
- ERISA disclosures
- A statement of rights under the Health Insurance Portability and Accountability Act (HIPAA)
- Advice on filing grievances or appeals
- Translations of the SPD into any languages other than English that are spoken by 10% or more of your employees, in keeping with ERISA requirements
- A review by attorneys to ensure accuracy and legal compliance
- Revisions as needed and the corresponding notifications required to communicate plan changes
We are able to work alongside your organization and create a wrap document that includes the required disclosures not typically found within other documents, including details such as the rights that participants are entitled to under ERISA, and the allocation of responsibilities and duties between insurers and employers. Some wrap documents will also cover benefits not subject to ERISA, such as a dependent care assistance program.
The Benefits Of SPD And Wrap Document Services From eBen
- Stay compliant with ERISA, COBRA noncompliance laws, and Internal Revenue Code
- Minimize the risk of financial penalties and lawsuits
- Save time and money by consolidating health and welfare plans within the same wrap document to avoid needing to update multiple documents every time there is a regulatory change, or your company changes the benefits they offer
- Simplify the process for filing form 5500. Rather than filing a separate form for every health and welfare plan, businesses that have a wrap document will be able to file a single form and associated schedules for all the benefits that are included in the wrap document.
- Demonstrate your company’s commitment to its health and welfare plans
- Protect your company from potential lawsuits filed by employees by clearly laying out exclusions and limitations
Keep in mind that the insurance booklets and insurance certificates that are provided by insurance carriers are based on state insurance regulations, and do not generally meet the SPD requirement under federal law.
Penalties For Not Meeting SPD Requirements
Organizations which fail to meet Summary Plan Description requirements may be subjected to a variety of penalties. eBen’s employee benefits consultants can help organizations avoid penalties associated with failing to meet summary plan description requirements. Failure to meet SPD requirements may result in the following penalties:
- A fine of $110 each day per participant for failing to provide a plan document or SPD within 30 days of a request
- A fine of $161 per day, but not exceeding $1613 per request, for failing to provide the Department of Labor with any information they request related to your company’s employee benefits plans
- Failing to meet the SPD requirements may also trigger a plan audit by the Department of Labor. This may result in further penalties for other instances of noncompliance that are uncovered.
The Department of Labor has recently increased its auditing staff to better investigate compliance with healthcare reform. As a result, companies of all sizes are being audited regularly and are required to furnish these important documents currently.
Contact The Employee Benefits Professionals At eBen
Our experienced employee benefits consultants can create and manage your company’s summary plan description and wrap documents, to ensure your organization remains compliant with ERISA.
We are able to design a plan that meets your organizational needs and keep you up to date on any changes to the regulations which may impact your benefits program. Contact the employee benefits professionals today by calling (910) 518-9338 or use our online contact form to get started.
