FOA Client Package Spotlight #5 – Compliance Documents (WRAP, POP & SPDs)

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Suppose your company provides welfare benefit plans to your employees. In that case, you should become familiar with an ERISA WRAP document, a POP (premium only plans section 125 or section 125 pop plan), and summary plan descriptions (SPDs). Melissa Enderby delivers FOA Client Package spotlight #5 on compliance documents (ERISA WRAPS, POPS, and SPDs) in today’s video.


Employer-provided benefits that fall under ERISA because they are considered “employee welfare benefits plans’ include:

1) Medical, dental, and vision insurance plans

2) Health flexible spending accounts (also known as health care reimbursement accounts) 3) Accidental death and disbursement (“AD&D”) insurance plans

4) Long-term and short-term disability plans

5) Prescription drug plans; and

6) Group term life insurance plans.


The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for employee benefit plans maintained by private-sector employers. Under ERISA, employer-sponsored welfare benefit plans, such as group health plans, must be described in a written plan document. In addition, employers must explain the plans’ terms to participants by providing them with a summary plan description (SPD). The insurance certificate or benefits booklet provided by an insurance carrier or other third party for a welfare benefit plan typically does not satisfy ERISA’s content requirements for plan documents and SPDs. However, employers may use wrap documents to meet ERISA’s insurance certificate or benefits booklet requirements. We refer to this document as a “wrap document” because it essentially wraps around the insurance certificate or benefits booklet to fill in the missing ERISA-required provisions. The ERISA plan document or SPD comprises the insurance certificate or benefits booklet and the wrap document when used.


A premium-only plan (POP) is the most basic and most popular Section 125 plan, often referred to as “cafeteria plans.” While there are different types of Section 125 plans, each provides employers and employees with the chance to save money by reducing their tax liabilities. A POP plan allows employees to pay their portion of insurance premiums with pre-tax dollars. Benefits typically offered within a POP plan include health, dental, vision, accidental death and dismemberment, short- and long-term disability, and group life insurance up to $50,000.


All group health plans subject to the Employee Retirement Income Security Act (ERISA) are required to provide participants with a summary plan description (SPD). It would be best if you delivered an SPD in a manner calculated to be understood by the average plan participant and sufficiently comprehensive to inform participants about their rights and obligations under the plan. You must automatically distribute the SPD to plan participants by specific deadlines. It also must be provided upon a participant’s request. The SPD must include particular types of information, such as the plan’s eligibility rules. There are serious legal consequences associated with not complying with ERISA’s requirements for SPDs. For example, a plan sponsor can pay up to $110 per day it does not provide the SPD within 30 days after a participant’s request. This Compliance Overview addresses many of the commonly asked questions about SPDs. It also contains a checklist for the basic information required in an SPD.


Do you pay for ERISA WRAP, POP, and SPD documents? If so, at what cost? How much money does an ERISA WRAP document cost your company? Rather than paying a third party to create and maintain your compliance documents, Fusco Orsini & Associates can manage them in-house on your behalf. Some of our business clients receive these services free of charge, and others pay a very reasonable fee for ERISA WRAP, POP, and SPD documents. Contact your broker for more information, or complete the form below. Thanks for visiting us!


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