Wrap Plan Documents – The New Fundamental ACA Compliance Tool

Reasons for an Employer to create a Wrap Plan Document and Distribute an SPD

Required by ERISA

Combines several benefit offerings into one plan for 5500 filing or other purposes

Allows employer to define elements that are often inconsistent or missing in certificates issued by insurance carriers

Allows employer to create plan features that the carrier will not document in insurance certificate

ACA has made them more important than ever!!

Required by ERISA Required by ERISA for ALL plans

Regardless of size or funding

But not plans that are exempt from ERISA – church and governmental plans

Informs participants and beneficiaries about their benefits, rights, and obligations under the Plan

ERISA requires that the plan documents include specific information

Statement of Rights

Plan Sponsor Name

Plan funding information

Required by ERISA

Distribution Requirements for SPD

Within 120 days of implementing new group health plan

Within 90 days of enrollment in plan

Within 210 days following the last day of the 5th plan year if SMM

Within 210 days following the last day of the 10th year if no SMM

Plan document must be provided within 30 days of a request

Penalties

Up to $110 per day for failure to provide

Failure to have one does not invalidate the plan

Bigger concern is when documents issued do not accurately reflect the plan’s intent

Combine Several Benefit Options into One Plan

If subject to 5500 filing requirements, will allow employer to file only one 5500 (and will reduce penalties if filing is late or missed)

HRA/Medical Plan or Wellness/Medical Plan – Employer will want to have these plans combined so that you can limit COBRA on the HRA or wellness to those who elect COBRA on medical.

If the plans are separate, then participants have to be given a separate COBRA election

Create Consistent Plan Features and Add missing ones

Eligibility

Medical carriers often will not customize

ACA waiting period and eligibility details

Leave provisions – each insurer or administrator will define based on their own templates and preferences

Effective date and termination of employee and dependent coverage

Usually not consistent from carrier to carrier

Plan year

Not included in most carrier certificates

Needed to determine compliance date for most ACA requirements

Design Plan Features

Expand eligibility (with permission of carrier when insured or stop loss carrier if self-funded)

Limit eligibility

Spousal exclusion (and/or dependent)

Change wording to exclude those that do not comply with eligibility audit

Include wellness plan requirements

Add benefits or exclusions (with permission of carrier)

ACA

Increase in DOL Audits

Increase in provider initiated claims appeals

More items that need to be documented

Waiting periods

Eligibility

Notices

Polestar Benefits, Inc.412 Jefferson Parkway, Suite 202Lake Oswego, OR 97035(855) 222-3358www.pole

starbenef

its.com

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Questions? Comments?

We are happy to help!