| For the past several years, the Department of Labor, specifically the Employee Benefits Security Administration (EBSA), has stepped up enforcement efforts with respect to employee health and welfare and pension plans. Significant resources have been pooled to randomly audit these plans for ERISA compliance. Employers sponsoring health plans are being closely scrutinized on compliance topics from HIPAA to COBRA to reporting and disclosure requirements and everything in between.
Surprisingly, most audits are identifying deficiencies in complying with the ERISA Summary Plan Description (SPD) disclosure requirements. Insurance carriers generally provide a comprehensive description of specific benefits and limitations, but these benefit booklets by and large do not include all of the ERISA disclosures that plan sponsors are mandated to provide. Adopting a "Wrap SPD Document" can solve this problem by insuring that all the ERISA required language is present, while referencing other documents that provide additional details of the plan.
A wrap document, also referred to as a wrap plan, wraps itself around, and incorporates by reference, the insurance certificates, policies, contracts, booklets and other benefit descriptions provided by insurance carriers. The document adds the necessary language to comply with ERISA requirements such as stating plan name, year and number, agent for service of legal process, and claims procedures. Another benefit of the wrap document is to group all the benefit plans together to form one plan for Form 5500 filing purposes, which reduces administrative costs.
Utilizing a wrap document also provides a mechanism for plan sponsors to quickly and easily keep their welfare plan documents compliant with the ever-changing federal rules. From a compliance perspective, a wrap document can ensure consistency between the plan document and the plan operations of the insurance carrier, which is vital in assisting the plan sponsor to fulfill its fiduciary duty to make certain the plan is operating according to the plan document.
You can purchase our ERISA Wrap Document Package to get all your health and welfare plan documents into compliance. Our package consists of an adoption agreement, wrap document with commentary, wrap document, resolution, and SPD.
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