Wrap Summary Plan Description (SPD)
If you offer group health insurance you’re now required by ERISA law, enforced by the Department of Labor and now the Affordable Care Act, to distribute a Wrap SPD within 120 days of the Plan’s effective date.
The ERISA and ACA required Group Health Insurance Wrap SPD document is now available for a $99 one-time fee. You only update your Wrap SPD document as your benefit options change. The low cost Wrap SPD document is limited to fully insured group health insurance plans only.
Here are the Wrap SPD document requirements by ERISA and the Affordable Care Act as succinctly as possible:
- If you offer group health insurance you’re now required by ERISA law, enforced by the Department of Labor and now the Affordable Care Act, to distribute a Wrap SPD within 120 days of the Plan’s effective date.
- Failure to provide the Wrap SPD within 30 days of request triggers a $110 a day fine per participant. Not having a Wrap SPD can also trigger an audit by the Department of Labor.
- The insurance company’s Master Contract, Certificate of Coverage, or Summary of Benefits is not a Wrap SPD.
- This requirement applies to all employer sponsored group health insurance offerings, including a one-person plan.
The Summary Plan Description, or SPD, is the main vehicle for communicating group health insurance plan rights and obligations to participants and beneficiaries. As the name suggests, it is a summary of the material provisions of the plan document, and it should be understandable to the average participant of the employer. However, in the context of health & welfare benefit plans, it is not uncommon for the SPD to be a combination of a complete description of the plan’s terms and conditions, such as a Certificate of Coverage, and the required ERISA/ACA disclosure language.