The Employee Retirement Income Security Act of 1974 (ERISA) requires plan sponsors of health and welfare benefit plans (e.g., medical, dental, vision, HRA, FSA) to provide a Summary Plan Description (SPD) to plan participants at certain times. An SPD is a written document that summarizes the material provisions of a plan and describes how the plan operates.

When do SPDs have to be provided to plan participants?

-Newly Covered Participants: SPDs must be provided to newly covered participants (e.g., new hires) within 90 days of the participant first being covered by the plan.

-New Plans: SPDs for new plans offered by an employer must be provided to plan participants within 120 days of the plan becoming established.

-5-Year-Rule: An updated SPD must be provided every 5 years if any material changes are made to the plan. The updated SPD must be provided no later than 210 days after the last day of the end of the fifth plan year.

-10-Year-Rule: A copy of the SPD must be provided to plan participants every 10 years if there are no material changes to the content of the SPD. The SPD must be provided no later than 210 days after the last day of the end of the tenth plan year.

SPDs are not required to be distributed annually; however, whenever there are any material changes to a plan a plan amendment should be issued, and a Summary of Material Modifications (SMM) related to the plan should be distributed to plan participants no later than 210 days after the last day of the plan year for which the material change applies.

It should also be noted that plan documents issued by insurance companies and benefit administrators typically do not meet all the SPD disclosure requirements of ERISA. Employers will often need to supplement the documents issued by insurance carriers and benefit administrators to meet ERISA’s disclosure requirements. This supplemental document is typically referred to as a “Wrap Document.” A Wrap Document is usually prepared as a single document that applies to all health and welfare benefit plans. It is said to wrap-around all of the health and welfare benefit plans, hence the name Wrap Document. The combination of the Wrap Document and documents provided by insurance carriers and benefit administrators will usually satisfy the SPD disclosure requirements of ERISA.