ERISA – Summary Plan Descriptions

By:  Cynthia Eastham

If you are an employer that has extended the opportunity for employees to enroll in a group benefit plan, did you know that no matter what your group size is you may have to comply with ERISA (Employee Retirement Income Security Act)? 

ERISA is a federal law that sets standards for retirement and health benefit plans and requires employers that offer a group benefit plan to provide information about their plan and how it operates.  This document is called a Summary Plan Description (SPD) and must be written for the average participant, include information about the benefits being offered, the employee’s rights and obligations under the plan, etc.

Unfortunately, carrier plan information does not suffice to keep employers compliant with the federal regulation.  Keep in mind that carriers provide information according to state law and not federal.

Employers must also provide a Summary of Material Modification (SMM) which would describe changes to a plan or other information that is required to be included in an SPD.

The SPD along with other regulated documentation such as eligibility requirements, Summary of Benefits and Coverage (SBC), certificate of coverage, latest form 5500 and other documentation should be automatically provided to employees upon becoming covered by the plan and within 30 days upon request.  A plan has 120 days after becoming subject to ERISA to distribute the SPD and an updated SPD must be provided to employees every 5 years if changes have been made.

Look for our upcoming Compliance Webinar in April, 2016 for additional information on this and other important compliance information.  Although Patterson -Bryant, Inc. does not claim to be experts on ERISA we partner with people who can help.   If you have questions or need assistance regarding compliance or group benefits give us a call at 248-433-1902.