Do you offer any benefits to your employees on a pre-tax basis such as medical, dental, life insurance, Flexible Spending Accounts or Health Savings Accounts? Most employers offer at least one of these benefits but don’t always realize that there are plan document requirements. Most employers think that they have a valid plan document and most do not.

According to the Department of Labor, The Employee Retirement Income Security Act of 1974 (ERISA) requires the employers who offer these plans to have plan documents that outline the specifications of the plan and how it is to be operated. Insurance companies usually provide a written agreement that outlines the basic provisions of the plan and communications for plan participants. However, these rarely satisfy the requirements of an ERISA plan document or provide the proper documentation to the plan participants.

A good choice for plan sponsors is to adopt a wrap plan document to incorporate the required ERISA language into the plan document as well as into the Summary Plan Descriptions (SPDs) that must be given to employees. The use of a wrap document also shows that the plan sponsor views the benefit program as one program with multiple benefits and allows the filing of one annual Form 5500 for those plans that need to file.

If you think you may be missing the plan document and SPD, let us know and we can help you to get the proper documentation in place.