All employers that provide ERISA covered health benefits are REQUIRED to provide plan participants with a Summary Plan Description free of charge?
We are now past the introduction period of the Affordable Care Act and the many changes to plan options. By now all employers have completed enrollment, and now is the time to focus on compliance, beginning with the Summary Plan Description (SPD).
As audits and fines continue to occur at an increased rate, employers need to ensure they maintain a current compliant Summary Plan Description (SPD). An SPD is a written document that gives information about the welfare benefit plan, a summary of benefits available, financial information, the rights and responsibilities of participants and beneficiaries under the plan, and how the plan operates. If a plan is changed, participants must be informed, either through a revised SPD, or in a separate document, called a summary of material modifications, which also must be given to participants free of charge.
What if the employer doesn’t provide plan participants with a SPD?
An employer that fails to comply with ERISA's minimum standards can lose its favorable tax status, resulting in adverse tax consequences. The employer can also be subject to civil action to correct the violation(s), civil penalties, and criminal penalties for willfully violating any provision. A willful violation of any disclosure provisions by an individual (e.g., plan administrator) can result in a fine of up to $5,000 and imprisonment for up to one year. For an employer, the penalty is a fine of up to $100,000.
How can I make sure we’re compliant and have a SPD for our plans?
If you do not have a current compliant SPD you are at risk. For a small fee relative to your financial exposure, HR One will work with you to develop your SPD. If you have questions or for more information regarding SPDs, E-mail us today to schedule a time to review our program.
SPDs ARE NOT OPTIONAL- THEY ARE A COMPLIANCE REQUIREMENT