The Employee Retirement Income Security Act of 1974 (ERISA) requires group health plans to have a written plan document and a summary plan description (SPD). The SPD needs to be provided to all participants upon enrollment in the plan. Insurance carrier documents including the contract, policy or certificate booklet (collectively, the certificates) do not generally satisfy the ERISA requirement.
A Wrap document essentially “wraps” around the insurance carrier’s certificate of coverage providing all the required ERISA language. A Wrap document can also combine or bundle multiple employee-sponsored plans into a single document which helps to simplify 5500 filings.
- Use one document to satisfy the ERISA SPD requirement and other disclosure requirements
- Use one document for all of the employers health and welfare benefits
- File one Form 5500 rather than a separate one for each benefit
If an employer is subject to ERISA they're required to:
- Have a written plan document for each group and welfare benefit plan
- Have a SPD for each group and welfare benefit plan
- Keep their plan records for 6 years
- File an IRS Form 5500 if they have more than 100 participants