Can you please advise me on the regulations for providing summary plan descriptions (SPDs) for our employees? Since we don’t have SPDs yet, should there be an urgency in getting them produced for distribution this year or can this be a project for 2016?
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As required under ERISA, the SPD, which is furnished to participants in a group health plan, must accurately describe the contents of the group health plan. This is not a new requirement. If you’re providing a health plan that’s covered under ERISA, you must also be providing an SPD, so there is some urgency in getting this taken care of.
The SPD must be written in a manner to be understood by the average plan participant, and in fulfilling this requirement, the plan administrator should take into account the level of comprehension and education of the typical plan participant and the complexity of the plan itself. When preparing an SPD, a plan administrator should strive for a document that is straightforward, uses appropriate clarifying examples, and avoids technical jargon.
As described in the Department of Labor (DOL) regulations on SPDs, the format of an SPD must not have the effect of misleading, misinforming, or failing to inform participants and beneficiaries of the benefits under the plan. The benefits under the plan must be accurately described, and as importantly, the exceptions, limitations, or exclusions under a plan also must be described no less prominently than the benefits that are provided are described.
The requirements for SPDs are lengthy and complex and are spelled out in 29 CFR Section 2520.102-3, sections (a) through (u): https://www.law.cornell.edu/cfr/text/29/2520.102-3
Your insurer may be able to help you with what’s known as a “wrap” document that, in combination with their certificate of coverage, satisfies the SPD documentation requirements.
I hope this information is useful, and we thank you for your inquiry. As always, we recommend that you consult with qualified local benefits counsel familiar with the details of your specific situation.