Summary Plan Description & Wrap Document
Every employer is required to deliver a Summary Plan Description (SPD) to all participants in any company sponsored benefit plan. The SPD explains the plan’s benefits, claim review procedures, and the participants’ ERISA rights. Many employers mistakenly believe that providing participants with the booklet issued by the insurance company fulfills their obligation to provide participants with an SPD. However, in most cases, the group needs to provide additional information regarding participants’ rights and obligations under the plan to satisfy ERISA requirements. Failure to provide an SPD can result in a penalty of $110 per employee per day for up to 125 days. You may need to provide multiple SPDs based on the number of plans offered to your employees such as a PPO, HMO, POS as well as dental, vision, etc. BeneFlex can prepare these documents as well as a Wrap Document which bundles all benefits and SPDs into one.
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