Your Health Plan Needs a Document, SPD Too

March 18, 2014 ( – Many companies are not maintaining a plan document for their health plans or providing employees with summary plan descriptions (SPDs), according to a survey.

HR360 found 71% of brokers reported business clients were not providing SPDs or maintaining plan documents—two major requirements under ERISA (Employee Retirement Income Security Act). The top reasons brokers cited for employers not distributing SPDs to their employees or maintaining plan documents included:

  • Mistakenly thought they were compliant by distributing benefits booklets/summaries;
  • Not aware of the ERISA requirements;
  • Too difficult and time consuming to develop the documents; and
  • Too expensive.

Many companies mistakenly assume insurance contracts, certificates of insurance and benefits summaries fulfill the ERISA requirements for an SPD and plan document—but they do not include the required or recommended provisions that protect the plan and the employer, HR 360 says.

Employers/plan administrators may be liable for serious penalties if they do not provide an SPD or have a current plan document. Failure to provide an SPD or plan document within 30 days of receiving a request from a plan participant or beneficiary can result in a penalty of up to $110/day per participant or beneficiary for each violation. The lack of an SPD could trigger a plan audit by the U.S. Department of Labor (DOL). 


A wrap SPD includes required ERISA provisions and recommended information to "wrap" around the benefit summaries, contracts and/or insurance certificates for each fully insured or self-funded plan option or component plan. To comply with ERISA requirements, employers must follow the DOL’s specific guidelines for distributing SPDs to plan participants and distribute both wrap SPDs and all benefit plan component documents.

All ERISA-covered benefit plans, including group health plans and other welfare plans, must also, by law, be administered in accordance with a written plan document. The wrap plan document is designed to meet plan documentation requirements under ERISA, HIPAA (Health Insurance Portability and Accountability Act) and other federal laws and to incorporate all other welfare plans, insurance contracts and other relevant documents into a single plan. These materials can be kept together for administrative ease and must be made available to plan participants and beneficiaries on written request.

HR360 has developed WrapDoc360,, an easy-to-use online system, developed with a The Wagner Law Group, that generates wrap SPDs and wrap plan documents. With a volume purchase, costs can be as low as $6 to $8 per set of Wraps.

“Wrap SPD and wrap plan document generators provide brokers with an efficient way to help their clients comply with these major ERISA requirements. With an increasing number of DOL audits, wrap SPDs and plan documents will play a key role in closing a company’s compliance gap at an affordable price,” says Lillian Shapiro, president of HR360.