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February 17, 2016 - The Affordable Care Act is complex enough but the U.S. Department of Labor plans to conduct more ERISA compliance audits on medical plans in the future.

We are finding that many Employers do not have the appropriate plan documentation and disclosure requirements for their health and welfare benefit plans. §402 of ERISA mandates that every employee welfare benefit plan, i.e., group health plans, dental plans, Flexible Spending Accounts, etc., be in writing. The written plan document must clearly identify certain basic information about the plan, including:

  • The named fiduciary who will have the authority and responsibility to administer the plan;
  • Procedures for amending and terminating the plan;
  • The source of plan contributions;
  • The allocation of responsibilities for the operation of the plan between the employer and the insurance carrier or third-party administrator, (TPA).

The insurance policy coverage certificate or plan booklet received from the insurance carrier or TPA does not satisfy the plan document requirement; they rarely identify a named fiduciary or include the procedures for amending the plan and, often fail to allocate responsibilities for the operation and administration of the plan. A WRAP document helps to meet those obligations by supplementing the plan booklet with the information necessary to comply with ERISA and presents the data in a clear comprehensive fashion. In essence, the WRAP document fills the gaps left by insurance carriers and TPAs. WRAP documents may be used by employers to consolidate employee welfare benefit plans into a single plan, which could reduce the costs associated with filing multiple annual reports, distributing multiple summary annual reports and amending multiple plans in response to legislative or regulatory changes.

United Financial Group, Ltd. is ready to assist you with this important compliance document. Please call us at 516-222-0021 or email us at www.unitedfinancialgroup.com for a proposal and fee quotation today.

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