Summary Plan Description. October 5, 2016

Transcription

1 Summary Plan Description October 5, 2016

2 Agenda ERISA Requirements Plan Documents SPDs Summary of Benefits and Coverage Penalties Getting Your Plan Compliant 2

3 ERISA Requirements ERISA Employee Retirement Income Security Act of 1974 Federal law setting minimum standards for pension and health and welfare plans in private industry. Applies to private employers of all sizes. Church plans and governmental plans are generally not covered by ERISA. - Church plan: employee benefit plan established or maintained by a church or association of churches that is exempt from tax under Section 501 of the tax code. - Governmental plan: plans maintained by federal, state or local governments. 3

4 ERISA Employee Welfare Benefit Plans Employer-provided welfare benefits subject to ERISA include, but are not limited to, the following: Medical Dental Vision Health Flexible Spending Accounts (FSA) Short-Term Disability Long-Term Disability Group Term Life AD&D 4

5 ERISA Requirements: Plan Document ERISA requires that every welfare plan be established and maintained pursuant to a written instrument. Formal document signed by officer of the company. Details the terms of the plan. Provides internal guidelines for plan operations, including the employer s right to amend or terminate the plan at any time. Not automatically distributed to participants (although must be provided upon request). 5

6 Summary Plan Description (SPD) What is it? ERISA requirement for group health plans Summary of terms described in the plan document Notifies the participants of the plan s terms and legal notifications Should be written in a way that participants can easily understand Must contain information: 1. About the plan (eligibility, identifying information, benefits, coverage information, funding mechanism) 2. About plan administration (claims procedures, limits on lawsuits, authorization procedures) 3. About participants legal rights (ERISA rights, COBRA notice, GINA, USERRA, etc.) 6

7 What is NOT an SPD -Carrier s Certificates of Coverage -Employee Handbook -Business Certificate -Insurance Company s Master Contract -Benefit Summary -Summary of Benefits and Coverage 7

8 ERISA Requirements: SPD Distribution Furnish to whom? Participants covered under the plan - Covered employees (generally not spouses or dependents) - Covered retirees - COBRA qualified beneficiaries - Child/parent-guardian under QMCSO - Spouse/dependent of deceased retiree - Guardians of incapacitated persons When must SPD be furnished? - Within 90 days for new employee - Within 120 days for new plans - Updated SPD every 5 years if material changes made - Every 10 years if no material change 8

9 ERISA Requirements: SPD Distribution How to Distribute Delivery method must be reasonably calculated to ensure actual receipt - First class mail - Inserts to Company Publications - Cover must be prominently display notice that SPD is contained in that issue - Steps must be taken to ensure delivery to any participant not on mailing list - Hand Delivery - Approved by DOL, but may be difficult to prove 9

10 ERISA Requirements: SPD Distribution Electronic Disclosure Safe Harbor Rules General Requirements - the electronic materials must be prepared and furnished in accordance with otherwise applicable requirements; - notice must be provided to each recipient, at the time the electronic document is furnished, of the significance of the document and of the right to request and obtain a paper version of the document; and - a paper version of the electronic document must be available on request at no charge 10

11 ERISA Requirements: SPD Distribution Participants To Whom Electronic Disclosures May Be Made - Participants with work-related computer access, must have o o Ability to access documents at any location where participant reasonably expected to perform employment duties; and Access to electronic information as integral part of employment duties - Participants without work-related computer access must consent to receive electronic disclosures o Consent should include statement explaining - Types of documents provided electronically - That consent can be withdrawn (& procedures for doing so) - Right to request paper copies - Any hardware or software requirements necessary to access electronic document 11

12 ERISA Requirements: SPD Distribution Posting SPDs on Company's Website or Intranet Add a prominent link from the website's homepage to the separate section that contains the SPDs; Provide directions on the website for how to replace a lost or forgotten password to the extent one is needed; and Maintain the SPDs on the website for a reasonable period of time following notice to employees of their availability. 12

13 ERISA Requirements: SBC Summary of Benefits and Coverage ACA ERISA expansion - SBC must be provided to participants and beneficiaries at initial enrollment, annual open enrollment and within 7 business days of a request. - Template available on DOL and HHS website Which Plans Must Provide the SBC? All group health plans, EXCEPT - Excepted benefits - Retiree-only plans 13

14 ERISA Document- Penalties Failure to furnish SPD or other required documents Beneficiaries can bring suit to enforce ERISA Criminal penalties for willful violations - Up to $100,000 or imprisonment up to 10 years - Fine can be increased up to $500,000 if it is against an entity Failure to furnish in response to written request Have 30 days to comply with written request for SPD $110 per day penalty Can also trigger COBRA penalties SPDs are occasionally how group health plans provide initial notice of COBRA rights. If it s not handed out, then a COBRA violation occurs. SBCs subject to separate penalty of up to $1,000 per failure (failure to send to each participant is considered a separate offense) 14

15 ERISA Requirements: Wrap Document Wrap short-hand for a wrap-around document Incorporates benefit certificates ( subsidiary contracts ) by reference and includes required ERISA language. Final wrap document will be the benefit certificates, the Plan Document and SPD. Two Types of Wrap Documents - Single-plan Wrap - Multi-plan Wrap 15

16 Get Your Plan Compliant Compliance Consulting Department can prepare Wrap Documents at nominal cost. $400 (includes plan document and SPD) Information Needed Completed Intake Form Signed Service Agreement. 16

17 Reform: Stay Connected Stay on top of changing landscape of health care reform and other employment laws through J.W.Terrill s Seminar Series and TerrillConnect. Visit for registration. Subscribe to TerrillConnect for weekly updates Wednesday, October 19, 2016 Friday, October 21, 2016 Wednesday, November 16, 2016 Upcoming Events Best in Class Safety Program Structure (in-person seminar at J.W. Terrill) RSVP By October 11, 2016 Marketing Strategies: Promoting Wellness in the Workplace (webinar) Effective Performance Management (webinar) Tuesday, November 22, 2016 MSHA Part 46 Refresher Course Thursday, December 08, 2016 Retirement Plan Seminar Topic to Be Announced (webinar) Friday, December 16, 2016 Health Care Reform Update (webinar) 17

18 Dawn Kramer Marcus Wilbers Andie Schieler Q& A compliance@jwterrill.com 18