What is ERISA Wrap SPD?
If you don’t know the answer to this question, you’re not alone. There are many people that are unfamiliar with ERISA and its requirements. A lack of knowledge could cause a number of problems for you.
Who Needs To Learn About ERISA?
Anyone who is either an employer or an employee should take the time to educate themselves about ERISA. If you are an employer, federal law requires you to meet the ERISA requirements. If you are an employee, then you are entitled to certain things because of ERISA requirements. You should make sure you are getting everything that you need.
It’s okay if you don’t know a lot about ERISA right now, but you should work to change that. You can find answers to many common questions below.
What Is ERISA Wrap SPD?
ERISA stands for the Employee Retirement Income Security Act. It describes a group of federal laws that were specifically designed to protect the employees that work for a company that provides things like pension or retirement plans. It also protects employees who work for a business that provides insurance coverage.
If an employer offers a plan that is subject to ERISA, they need to make sure that they follow compliance procedures. This includes proper reporting, written plan documents, and a process for documenting claims. Employees must also fill out necessary forms, such as the Summary Annual Reports.
SPD stands for Summary Plan Description. This is a detailed description of the plans and benefits provided. The booklets that insurance companies provide are not enough to be SPD compliant. Employers will have to work to satisfy the Department of Labor requirements.
A Wrap plan can help employers to do exactly that. A Wrap plan is a plan document that can either wrap around one benefit or combine multiple benefits into a single document. With a Wrap plan, employers can ensure that they have documentation with proper ERISA language that they can distribute to their employees
Who Is Exempt From These Regulations?
The majority of employers are subject to ERISA regulations. The only employers that are exempt are the employers that do not offer benefits like retirement plans or health insurance at all. LLCs, corporations, and nonprofits all have to comply with these regulations.
With that said, there are a few exemptions to the rules that are in place. Governmental employers do not have to follow these regulations, and church plans are exempt as well. This is because churches are currently exempt from taxes. While these types of employers are exempt right now, it’s possible that this could change in the future.
What Are The Penalties For Failing To Meet ERISA Requirements?
If a company does not meet the requirements outlined by ERISA, they will have to face a number of penalties. If the SPD is not given to the Department of Labor by the necessary deadline, employers can be fined up to $152 a day until the correct documentation is given.
If a company continually refuses to submit this documentation, additional penalties could be added on to the ones described above. Any company that is subject to these requirements needs to work hard to make sure that they are compliant with existing regulations.
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If you’re a business owner, you’ll want to take the time to learn more about ERISA and what it requires. You should ask us how we can take away the worries of ERISA compliance.
Need ERISA Wrap SPD Service? Call (515) 214-2424