25 Reasons Why Employers Need a Wrap Document

The Employee Retirement Income Security Act of 1974 (ERISA) requires employers to provide a Summary Plan Description (SPD) to employees if they offer health, dental, vision, life, disability or other benefits. To learn more about why group health plans are almost always subject to ERISA, click here. The plan documents that are provided by the insurance carrier fail to include all the required language and disclosures of the ERISA law. That means employers must supplement the carrier materials with additional document or risk costly penalties. Many employers choose to use a single document which “wraps around” all the benefits they offer so that they don’t have to prepare multiple documents, hence the name Wrap Document.

Here is a list of the 25 most common things not included in documents provided by insurance carriers but that are required to be included by the ERISA law:

1. Name of the plan or the plan’s common name.
2. Name and address of the plan sponsor.
3. Name, address and phone number of the plan administrator.
4. Plan year (which may be different than the policy year).
5. Plan number (as defined in the Form 5500 reporting rules).
6. Employer identification number (EIN), also known as the Tax ID number or (TIN).
7. Type of welfare plan (e.g. health, life, disability).
8. How the plan is administered (e.g. self-administered, insured, TPA).
9. Eligibility requirements for participation.
10. Name and contact information of the Agent for Service of Legal Process.
11. COBRA statement of rights.
12. Circumstances that could result in the disqualification, ineligibility, denial, loss, forfeiture, suspension, offset, reduction, or recovery of any benefit.
13. FMLA procedures.
14. Source of premium contributions (e.g. employer and employee contributions).
15. Schedule of premium contributions.
16. Funding medium (e.g. employer general assets or trust).
17. Procedures for qualified medical child support orders (QMSCO).
18. Statement indicating all plan documents will be available free of charge after an adverse benefit determination.
19. Statement of ERISA rights.
20. If the plan is collectively bargained, details on where a copy of the agreement can be found.
21. HIPAA special enrollment rights and privacy procedures.
22. Newborns’ and Mothers’ Health Protection Act disclosure.
23. Women’s Health and Cancer Rights Act disclosure.
24. CHIPRA special enrollment rights disclosure.
25. Terms under which the employer may amend or terminate the plan.