Welfare Benefit SPD (Summary Plan Description)
The Employee Benefits Institute of America ERISA Handbook states, “Subject to narrow exceptions, ERISA requires every employee benefit plan to have a Summary Plan Description. According to the DOL, the SPD is the primary vehicle for informing participants and beneficiaries about their rights and benefits under the employee benefit plans in which they participate. However, the DOL does not define the SPD; instead, it sets out with great specificity how the SPD must be written and what information it must contain.”
Interestingly, there is no small plan exemption for this requirement, so employers of every size who offer benefits need to have a Welfare Benefit Summary Plan Description. The insurer is not responsible for providing the SPD. Because of the various required elements, the Certificate of Coverage and the Employee Handbook generally do not constitute an SPD.
Although the requirement to distribute an SPD for all Welfare Benefit Plans is a long-standing one, we have recently heard of several Department of Labor audit failures due to the lack of this SPD. The penalties are $110 per day after the 30th day (of the discovery of the lack of or insufficiency of the SPD) for each day the SPD is not produced.
Diversified Administration, Inc. can provide you with the Welfare Benefits Plan SPD that you need.