spd Summary Plan Description Template Luxury Wrap Document

What is a Summary Plan Description Wrap (SPD) and do you Need One?

A summary plan description (SPD) contains the gist of the plan document, written in a way that beneficiaries will fully understand.

Failure to provide an SPD or plan document within 30 days of receiving a request from a plan participant or beneficiary can result in a penalty of up to $110 per day per participant or beneficiary for each violation. Lack of an SPD could trigger a plan audit by the U.S. Department of Labor (DOL).

Per the Employee Retirement Income and Security Act of 1974 (ERISA), all employers must have a written Summary Plan Description (SPD) for each separate welfare benefit plan (e.g., medical, dental, 125 plan, life, disability, etc.). The purpose is to inform participants of eligibility requirements, benefits, claims and appeals procedures, and rights under ERISA.

Plans also must provide a Summary of Benefits and Coverage (SBC) that accurately describes the benefits and coverage under the applicable plan. The SBC is a uniform template that uses clear, plain language to summarize key features of the plan, such as covered benefits, cost-sharing provisions, and coverage limitations.

How can an ERISA wrap document simplify meeting SPD requirements?

On the business side, employers should ensure that their SPDs cover everything it should. With no SPD or inadequate SPDs, employers expose themselves to lawsuits from employees. An SPD that follows ERISA guidelines and clearly lays out exclusions and limitations will protect the company against possible legal action.

Are your client’s SPD Wraps, and ERISA Required Notices complete and distributed?

In just a few steps, you are on your way to completing all your documents. 

Our Summary Wrap (SPD) Service Includes:

  • A One-stop document management location.
  • Your Documents are emailed.
  • Login anytime to update and receive new documents for distribution or audits. and updated automatically.
  • Documents are kept up-to-date with legal requirements. We always notify you of changes.
  • Premium Only Plan Documents (POP) created in less than 30 minutes. 
  • SPD Wrap Documents can usually be completed in less than 60 minutes!

We Offer Special Wholesale Rates for Brokers, Resellers, and Partners:

Resellers or Partners (Brokers, Payroll Providers, PEOs, CPAs, Attorneys, etc.) contact us for special wholesale rates at (833) 685-8400 x 1 or Solutions@hrserviceinc.com

SPD Wrap Service Options

Service Option 1 - SPDs Wrap

Common distribution methods include hand delivery, mail and electronic delivery.

Service Option 2 - ERISA eSolutions

A complete online package - your best value!

Introducing Our Newest Solution – ERISA eSolutions – 100% Online Tools to Make Compliance Simple and Fast!

ERISA eSolutions is an all-in-one service that provides a web-based Summary Plan Description (SPD) Wrap service that allows clients and their broker to create, store easily, and update summary plan description documents, as needed. With the SPD Wrap, it creates one document and overall SPD required for all health and welfare benefits such as medical, dental, life, disability, FSA, etc.

Although insurance providers may provide some information required for compliance, it is a common mistake for employers to think that the summary insurance information they receive from their insurance provider meets their summary.

Important SPD Legal Information:
 

“If you are sued [under ERISA], the first thing an attorney will do is see if your SPD follows ERISA guidelines,” says Jonathan Edelheit, vice president of United Group Programs, a third-party administrator (TPA) based in Boca Raton, Fla. With such high stakes, it’s important to work with your TPA to write, review and distribute your SPD correctly, and with your plan administrator to create a clear and comprehensive document, and to have the document reviewed by an attorney familiar with ERISA law, even if your TPA has a general counsel. Creating a clear SPD starts with investing in a process designed to pre-empt problems and protect an employer from expensive litigation in the future.

ERISA FAQ

What are the ERISA Filing Requirements?

Participants must receive an SPD:

  • Within 120 days of the plan becoming subject to ERISA (for example, a new group health plan);
  • Within 90 days of enrollment, for new participants;
  • Within 30 days of a participant’s written request for an SPD;
  • Every five years, if material modifications are made during that period; or every 10 years, if no amendments occur. ** If you offer group health insurance, you are required to distribute an ERISA Wrap SPD document to all Plan participants within 120 days of the Plan’s effective date.
  • A compliance solution for insured plans is a “wrap document.”
  • The insurance certificate typically does not meet all of ERISA’s requirements for SPDs.

  • The sponsor of an insured plan (not the issuer) is responsible for providing the SPD.

What is ERISA?

The Employee Retirement Income Security Acts of 1974 (ERISA) protects individuals under voluntarily established pensions and health plans in private industries.

ERISA requires plans to provide participants with plan information including important information about plan features and funding; provides fiduciary responsibilities for those who manage and control plan assets; requires plans to establish a grievance and appeals process for participants to get benefits from their plans, and gives participants the right to sue for benefits and breaches of fiduciary duty.

What Doesn't ERISA Cover?

ERISA does not cover group plans for government entities or churches. It also does not cover plans made only to comply with applicable workers’ compensation, disability, or unemployment laws and those maintained for the benefit of nonresident aliens outside America.

However, there is a difference between plan documents and summary plan descriptions. Plan documents explain the benefits participants are entitled to and provide guidelines to help administrators make informed decisions.

  • Name of the fiduciary who holds the authority to administer the plan;
  • Process for amending and terminating the policy;
  • Source of plan contributions and the distribution of responsibilities between the employer and insurance carrier.

What Happens if I Don't File?

Failure to provide written requested ERISA plan documents, Summary Plan Descriptions, Summary of material modifications, etc.$119 per day up to $594,129DOL
Late 5500 Report$25 per day up to $15,000 – IRS $1,100 per day, no cap – DOLIRS DOL
Failure to File annual 5500 Report$2,259 per dayDOL

We have experienced professionals who will help you prepare your ERISA wrap plan document. Give us a call or fill out the form below for more information.

free-consultation

Just complete the form, email solutions@hrserviceinc.com or call toll free 833.685.8400 x1

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