ERISA requires group health plans to have a written plan document in place, and provide a summary plan description (SPD) to plan participants upon enrollment in the plan, among other times. The written plan document is the instrument by which the plan administrator must operate the plan. The SPD is the instrument by which the plan notifies the participants of the plan’s terms, such as plan eligibility, funding, contributions and benefits. While the plan document and the SPD should be consistent, they are two separate documents and are both separately required by ERISA.

ERISA places the burden of satisfying the plan document and the SPD requirements on the plan administrator, which is generally the employer. Fully insured plans may think the insurance carrier’s contract, policy or certificate booklet (collectively, the certificates) with the plan sponsor satisfy the SPD requirement; however, most certificates will not likely satisfy the SPD requirement.

A Wrap document essentially “wraps” around the insurance carrier’s certificate of coverage creating a fully compliant plan document and SPD. A Wrap document can also combine or bundle multiple employee-sponsored plans into a single document which helps to simplify 5500 filings.

While carrier contracts, policies and certificate booklets may function as the written plan document, such documents will usually not include required ERISA language and specifics about the plan itself. Adding a wrap document will be necessary for compliance with the written plan document and SPD requirements under ERISA.