Most employers provide some type of employee welfare benefit plan that are subject to ERISA requirements. Examples would be medical, dental, vision, disability or insurance programs. An employer sponsoring these plans needs a written contract with the insurance company and an official plan document that spells out the eligibility requirements and rules of participation in the plan. In addition these documents, a plan may also need a “wrap” document to supplement the existing plan documentation.
An insurance contract typically addresses compliance with state laws as well as all of the insurance provisions. However, welfare plan documents also need to provide federal language regarding ERISA requirements. A wrap document provides that required ERISA language and wraps itself around the existing insurance contract and other plan documents to provide a complete plan document. This allows the plan to provide a comprehensive Summary Plan Description to employees that contains all of the necessary language.
A wrap plan document also bundles all of the different benefits and plan provisions into one plan for Form 5500 filing purposes. Generally, if your plan covers more than 100 employees, the filing of a Form 5500 is required. If there is no wrap plan document, a separate Form 5500 has to be filed for each vendor or benefit type. A wrap plan document allows one Form 5550 to be filed for the entire plan.
Not sure if you need a wrap plan document? We offer a free review of your welfare plan documents and can help to determine what you need to be in compliance. Pricing for a wrap document is $750.