Wrap Plan Document Language What to Know and What to Watch out For

Reasons for an Employer to create a Wrap Plan Document and Distribute an SPD

Required by ERISA Combines several benefit offerings into one plan for

5500 filing or other purposes Allows employer to define elements that are often

inconsistent or missing in certificates issued by insurance carriers

Allows employer to create plan features that the carrier will not document in insurance certificate

SPD Content Requirements Name of the Plan Name and Address of the Plan Sponsor EIN of Plan Sponsor Plan Number Plan Year Plan Eligibility provisions (definition of

employee, hours worked, classification restrictions, waiting periods, actively at work conditions, retirees)

Type of administration (insured or self-funded)

SPD Content Requirements Name, address and telephone number of the

plan administrator Named Fiduciary Information about collective bargaining

agreements Description or summary of the benefits Description of QMCSO procedures with

information about how the participants can obtain a full copy without charge

Cost sharing provisions – premium, copayment coinsurance, deductible

Annual or lifetime caps or limits

SPD Content Requirements Extent to which preventive services are

covered Coverage for new and existing drugs Whether and to what extent medical

devices, procedures and tests are covered Composition of the provider network, if any,

including a statement that a list of providers will be provided without charge upon request

Information about network and out-of-network coverage

SPD Content Requirements Conditions for obtaining emergency care Circumstances which may result in

disqualification, ineligibility, or denial, loss, forfeiture, suspension, offset, reduction, or recovery

Authority to amend or terminate the plan Statement of ERISA Rights Claims Procedures Description of COBRA rights

Additional Provisions Notice of Special Enrollment Rights Newborns and Mothers Health Protection Act

Notice Genetic Information Non-Discrimination Act Notice ACA Notices Information about Related Employers whose

employees participate Medical Loss Ratio Rebate Information HIPAA Privacy wording

Foreign Language Requirements Foreign Language Requirements

If < 100 employees with > 25% literate only in same non-English language; OR

If > 100 employees with lesser of 500 employees or 10% literate only in same non-English language, then: Must include prominent notice, in

non-English language, offering assistance

Assistance does not need to be in writing

Key Things to Think about What documents are part of the Plan? Are the documents consistent?

SPD, certificate or evidence of coverage, wrap SPD, employment policies

If not which one supersedes the other? Are terms repeated or incorporated by

reference? Is it clear who can be covered and when

coverage begins and ends? Have the documents been distributed as

required by ERISA?

Potential Problems

No SPD Conflicting Terms

Eligibility Continuation of Coverage Termination

Missing Information

Penalties No specific penalties in ERISA, but could be fines as part of

DOL audit Plan participants and beneficiaries may bring a civil action Plan Administrator may be fined up to $110 per day for

failure to provide a plan document or SPD within 30 days of a request by a participant or beneficiary

Plan Administrator may be fined up to $110 per day for failure to provide a SPD within 30 days of a request by the DOL

Criminal penalties may be imposed on any individual or company that willfully violates any requirements of Title I of ERISA Up to $100,000 per conviction ($500,000 for a company); Up to 10 years in prison; or Both

Polestar Benefits, Inc.412 Jefferson Parkway, Suite 202Lake Oswego, OR 97035(855) 222-3358www.pole

starbene

fits.com

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