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ERISA Wrap SPD Requirement – Are You in Compliance?
Since 2018 came and went without the promised repeal and replacement of the Affordable Care Act (ACA, aka “Obamacare”), the requirement that all sponsors of group health and welfare plans have an ERISA Wrap Summary Plan Description (SPD) remains in effect for 2019. Employers found in non-compiance with the 2019 ERISA Wrap SPD requirement face potentially huge ACA fines. Here’s what you need to know if you are an employer sponsor of a group health plan.
Application
The 2019 ERISA Wrap SPD requirement applies to all employers sponsoring a Section 125 Premium Only (Cafeteria) plan or Health Reimbursement Arrangement (HRA) with any of the following types of group health and supplemental insurance wherein the employee shares the cost of premiums:
Compliance
To be in compliance with the 2019 ERISA Wrap SPD requirement, the document must be drawn up by the employer or its agent containing the necessary information. It is then signed by the employer, and a copy is given to every employee eligible to participant in the plan. Then, the document must be kept on file for future reference.
The ERISA Wrap SPD on file will be referenced to give a copy to new hires, fulfill requests for a copy by employees, and in the event of an IRS or DOL audit.
Delivery
The 2019 ERISA Wrap SPD requirement to deliver a copy of the document to every employee eligible to participate in the plan can be met by personal hand delivery, USPS mail, or other personal delivery service (UPS, FEDEX, etc.).
Electronic delivery is allowed so long as the employee has access to a computer and printer at his or her regular work station and the employer provides a printed copy upon request.
Whichever of the above delivery methods an employer chooses, the company must document the delivery to every eligible employee as evidence that this rule was met.
Failure in Compliance
When an employer cannot produce the ERISA Wrap SPD within 30 days of a request by an employee, agent, or auditor, the company may be declared out of compliance with the law. This can mean the company incurs ACA fines of up to $110 per employee, per day, until the document is produced as requested.
Required Periodic Updates
In addition to the initial delivery of the ERISA Wrap SPD to employees, the document must be updated and re-delivered to participants every five years when there is any change to any part of the plan.
The document must be updated every ten years even if there has been no change at all to the plan.
For the 2019 ERISA Wrap SPD requirement, this would apply to documents dated 2014 and 2009, or older, respectively.
Meeting the 2019 ERISA Wrap SPD Requirement
Core Documents provides employers with everything they need to put in place an IRS- and DOL-compliant ERISA Wrap SPD in PDF format for just $99. This cost reflects a one-time setup fee, not an annual charge.
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Video: ERISA Wrap SPD
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Download the Core SPD Brochure and Forms:
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Download the FREE Core Documents Section 125 Cafeteria/POP Plan Employer Guide:
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Download the FREE Core Documents Health Reimbursement Arrangement Employer Guide:
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