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

starbenef

its.com

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Questions? Comments?

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