Ensuring your SPD’s are ERISA Compliant
As one of the most important documents for participants’ employees and their dependents, the Summary Plan Description (Wrap SPD) communicates what a Health Benefit plan(s) provides and how it operates. All employers who offer Group Welfare to their employees are required to provide SPD’s containing clear language about available benefits that are compliant with ERISA, PPACA and other laws.
Among other things, SPD’s communicate:
- When an employee can begin to participate in the plan. For example, the first of the month following 60 days.
- Who is eligible. For example, full-time employees with a regular work schedule of 30 hours or more.
- What health benefits are offered by the employer and how to file a claim and appeal procedures.
So what about the Summary of Benefits and Coverage (SBC)?
Think Cliff Notes of health insurance. It highlights coverage and cost for each plan in simple language and includes a uniform glossary of commonly used definitions of health coverage and medical terminology. For fully insured Health Benefit plans, the insurance company will provide the SBC.
Should my HR department be worried and how can BASIC help?
The Department of Labor (DOL) plans to substantially increase the number of ERISA compliance audits it conducts each year, which may strike fear into the hearts of many HR professionals. While experts and advisers don’t believe that companies or their staff members are deliberately doing things incorrectly, they do believe there is significant opportunity for error. In many cases employers are not providing employees with the required SPD. Some may provide “at glance” information regarding the benefits they are offering, but that doesn’t necessarily meet ERISA regulations.
SPD’s must describe all the important plan rules and benefits available under the plan, as well as key information about the plan, including:
- The plan name
- The employer’s name, address and employer identification number (also known as a federal tax identification number)
- The name, address and telephone number of the plan administrator
- A name and address of the plan’s agent for service of legal process
- The plan number for annual reporting purposes
- The plan year
- The source of plan contributions
- Information about plan trustees
- A claims procedure
- Information about eligibility for plan participation
- A statement of ERISA rights
BASIC simplifies the task of generating your Wrap SPD/Plan Document that reflects the current requirements for Medical, Prescription, Dental, Vision and Cafeteria benefits and prepares you for an audit before the DOL knocks at your door.
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