What is an ERISA wrap SPD?
A wrap document is a relatively simple document that “wraps” around the insurance policy, coverage certificate or plan booklet. Wrap documents become the SPD, which ensures that the required ERISA language is available in writing. A wrap document may cover benefits not subject to ERISA as well as ERISA benefits.
What is an SPD in insurance?
One of the most important documents participants are entitled to receive automatically when becoming a participant of an ERISA-covered retirement or health benefit plan or a beneficiary receiving benefits under such a plan, is a summary of the plan, called the summary plan description or SPD.
What does a SPD include?
The SPD must include “the most important facts they need to know about their retirement and health benefit plans including plan rules, financial information and documents on the operation and management of the plan.” An SPD must include specific information such as eligibility to participate in the plan, how a …
What is the difference between a wrap document and an SPD?
Wrap documents become the SPD which ensures that the required ERISA language is available in writing. As opposed to filing a separate Form 5500 for each health and welfare plan, a wrap document allows the employer to file a single Form 5500 (and associated schedules A) for all benefits covered under the wrap document.
Who needs a wrap SPD?
The Wrap SPD requirement applies to all employer sponsored group health insurance offerings, including a one-person plan. For large employers (100+) subject to Form 5500 reporting, Wrap SPDs are largely a necessity.
How often does an SPD need to be updated?
If there have been material changes to the plan, an updated SPD must be republished and distributed at least every five years. It is hard to imagine a plan that has not made a material change in the last five years, so, practically, almost all plans are required to distribute an updated SPD every five years.
Who should receive an SPD?
When you are first hired, you should receive an SPD covering your new employer’s health care and retirement benefits within 90 days. The company may distribute the document to you electronically if you regularly use a computer at work or as a hard copy.
When should I send SPD?
An SPD should be delivered to participants within 90 days after they become covered, whether they request it or not. Plan administrators of a new plan must distribute an SPD within 120 days after the plan is established.
Is a wrap SPD required?
Yes: 1. The Wrap SPD requirement applies to all employer sponsored group health insurance offerings, including a one-person plan. For large employers (100+) subject to Form 5500 reporting, Wrap SPDs are largely a necessity.
How often do you have to distribute SPD?
ERISA requires that an SPD is distributed to covered participants within 90 days after coverage begins, or within 120 days of a new program established. An updated SPD must be furnished to all included participants every five years and every ten years, even if the SPD has not changed.
What is a wrap plan for 5500?
Adopting a wrap plan document enables the plan sponsor to collapse Form 5500 filings (life, LTD, medical, dental, vision, etc.) into a single filing, thus eliminating much of the form preparation time and expense and the potential for multiple late-filing penalties.
Who is required to receive an SPD?
For newly created plans, an SPD must be distributed to participants and beneficiaries within 120 days after the plan is first instituted. Additionally, a plan sponsor must provide a SPD within 30 days of it being requested by a plan participant.