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Wrap Plan Document Language What to Know and What to Watch out For
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
SPD Content Requirements Name of the Plan Name and Address of the Plan Sponsor EIN of Plan Sponsor Plan Number Plan Year Plan Eligibility provisions (definition of
employee, hours worked, classification restrictions, waiting periods, actively at work conditions, retirees)
Type of administration (insured or self-funded)
SPD Content Requirements Name, address and telephone number of the
plan administrator Named Fiduciary Information about collective bargaining
agreements Description or summary of the benefits Description of QMCSO procedures with
information about how the participants can obtain a full copy without charge
Cost sharing provisions – premium, copayment coinsurance, deductible
Annual or lifetime caps or limits
SPD Content Requirements
Extent to which preventive services are covered
Coverage for new and existing drugs Whether and to what extent medical
devices, procedures and tests are covered Composition of the provider network, if any,
including a statement that a list of providers will be provided without charge upon request
Information about network and out-of-network coverage
SPD Content Requirements
Conditions for obtaining emergency care Circumstances which may result in
disqualification, ineligibility, or denial, loss, forfeiture, suspension, offset, reduction, or recovery
Authority to amend or terminate the plan Statement of ERISA Rights Claims Procedures Description of COBRA rights
Additional Provisions
Notice of Special Enrollment Rights
Newborns and Mothers Health Protection Act Notice
Genetic Information Non-Discrimination Act Notice
ACA Notices
Information about Related Employers whose employees participate
Medical Loss Ratio Rebate Information
HIPAA Privacy wording
Foreign Language Requirements
Foreign Language Requirements
If < 100 employees with > 25% literate only in same non-English language; OR
If > 100 employees with lesser of 500 employees or 10% literate only in same non-English language, then:
Must include prominent notice, in non-English language, offering assistance
Assistance does not need to be in writing
Key Things to Think about
What documents are part of the Plan?
Are the documents consistent?
SPD, certificate or evidence of coverage, wrap SPD, employment policies
If not which one supersedes the other?
Are terms repeated or incorporated by reference?
Is it clear who can be covered and when coverage begins and ends?
Have the documents been distributed as required by ERISA?
Potential Problems
No SPD
Conflicting Terms
Eligibility
Continuation of Coverage
Termination
Missing Information
Penalties No specific penalties in ERISA, but could be fines as part of
DOL audit
Plan participants and beneficiaries may bring a civil action
Plan Administrator may be fined up to $110 per day for failure to provide a plan document or SPD within 30 days of a request by a participant or beneficiary
Plan Administrator may be fined up to $110 per day for failure to provide a SPD within 30 days of a request by the DOL
Criminal penalties may be imposed on any individual or company that willfully violates any requirements of Title I of ERISA
Up to $100,000 per conviction ($500,000 for a company);
Up to 10 years in prison; or
Both
Polestar Benefits, Inc.412 Jefferson Parkway, Suite 202Lake Oswego, OR 97035(855) 222-3358www.pole
starbenef
its.com
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