In the quest for smoother administrative tasks that come with pension plan management, employers have decided to roll up all employee benefits into a single plan and summarize the benefits in one document using ERISA required language. This document is the wrap plan form, and it provides details of:
• All the welfare and health benefits the employer offers the employee and beneficiaries.
• References to complementary Insurance booklets and plan certificates. Such supplementary material helps to satisfy SPD requirements since they provide detail of the plan sponsor, the deductions and benefits employee will receive and the claim filing and investigation procedures.
• Disclosures mandated by ERISA and COBRA (Consolidated Omnibus Budget Reconciliation Act)
As a wrap plan document provider, we help employers generate wrap plan forms using our continuously updated ERISA SPD Compliance system. We’re committed to helping plan administrators to keep up with new labor laws and avoid penalties and audits. Our wrap plan forms compliance solution includes:
• Taylor-made wrap plan forms and wrap SPD documents that refer to complementary insurance and plan booklets.
• wrap plan forms distribution procedures – when and how to avail these forms to plan participants
• Continuous updates to keep your documents up to date with later amendments
Additionally, we work with ERISA law specialists to provide information about ERISA provisions. But if you are new to all the above terms, here’s a quick guide.
What is ERISA SPD?
The Federal Employee Retirement Income Security Act requires every employer who offers welfare and health benefits to employees as compensation for services rendered to comply with a few disclosure and reporting requirements. Failure to fully disclose the information pertaining to the benefits attracts penalties and audits.
ERISA came into force in 1974 with the aim to compel plan administrators to keep up with the promises they make to their employers. The law specifically mandates that:
1. Benefits are to be administered according to some well-written Document Plan that must be availed to employees upon request.
2. Plan administrators must fully communicate details regarding these benefits to their employees.
They must provide the employee with a readable Summary Plan Description (SPD) of the plan. Information in the SPD includes the plan number and name, the employee’s eligibility, the benefits afforded, deductibles, the plan’s sponsors and trustees and the claim filing and processing steps.
Additionally, the document must list the employee rights.
3. Pension administrators must annually report on the financial condition of the plan to the Department of Labor. This involves the filing of the Forms 5500 for plans with more than 100 participants or 5500-SF for plans with less than 100 participants
Consequently, compliance with ERISA and other labor laws comes with additional administration costs. There are many involved since ERISA requires particular content, formatting style, deadline and delivery of the SPD document. The Department of labor also keeps increasing the frequency of ERISA audits to check if these regulations are being followed. How then can a plan administrator to stay ahead of all these requirements? The solution is to use our Wrap Plan Forms service.
Which employers can benefit from our wrap plan forms?
Any private sector employer who is also a pension administrator can make use of our wrap plan forms service. We cater to private sector ERISA bound employers with at least 20 employees.
Why you need the wrap plan forms?
Wrap plan forms help reduce plan administration task. This is because all the welfare and health benefits are summarized under a single plan and wrapped around complementary insurance certificates. Therefore, only one document has to be filed during the FORM 5500 filing.
Wrap plan documents to help translate complex actuarial language to simple ERISA language that employees can understand. The wrap document is also used during audits reviews.
Wrap documents form help to summarize details of the plan to participants and auditors. These do not only help employees understand the benefits but also help avoid penalties that come with failure to comply with ERISA requirements. No other documents can be used as an alternative to wrap plan documents; this is because the language used in wrap plan forms differs from materials such as insurance booklets and should not be substituted with such.
Wrap plan forms are evidence of employers’ consciousness towards the employees’ welfare, and we as wrapping document providers to help facilitate this. With our sophisticated system, the employer can rest with a clear conscience knowing the ERISA requirements have been met.
Let BC2 help you with your need wrap plan forms, Form 5500 preparation and other business compliance needs.
Contact us by phone for risk-free evaluation (515)-244-2424