![]() Group insurance policies are written to cover the legal needs of the insurance carrier, not to satisfy the requirements of ERISA, or to provide legal protection to the Employer.ĮRISA’s requirements are the responsibility of the employer and plan administrator, not the insurance company. ![]() It is true, these documents generally include detailed descriptions of the benefits available under the plan however, they do not contain everything that is required to satisfy ERISA’s plan document requirements. Many employers make an incorrect assumption that the documents (e.g., coverage certificate or plan booklet) they received from their insurance carrier or third-party administrator (TPA) satisfies ERISA’s plan document requirements. Whereas the summary (of the) plan document (SPD) also referred to as a summary plan description, is “ the primary vehicle for informing participants and beneficiaries about their rights and benefits.” The plan document must clearly identify certain information and provisions about the plan benefits, including the responsibilities for the operation and administration of the plan. One requirement under Section 402 of ERISA is that all employers who offer group health and welfare benefits to their employees, maintain a written plan document, and distribute summary plan descriptions (SPD) to plan participants. Department of Labor (DOL) audit report for the 2019 fiscal year, 67% of investigations resulted in penalties or required other corrective action. Employers face strict deadlines and liability under ERISA law and failure to comply with ERISA requirements can lead to costly government penalties and even employee lawsuits. Many employers do not fully understand Employee Retirement Income Security Act (ERISA), how it impacts business and employees, and the possible risks it presents.
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