The summary plan description: what it is and why your health plan needs one
A summary plan description tells employees, in plain language, what their plan covers and how it works. A carrier booklet usually does not meet that standard. Employers that sponsor an ERISA plan are responsible for having a compliant one.
Six facts about summary plan descriptions.
SPD, Plan Document and Carrier Booklet
The plan document is the legal instrument, the SPD is the plain-language summary, and a carrier certificate is a third thing. Most employers have only the certificate.
What an SPD Must Contain
Federal regulation lists the required items, from plan name and administrator to claims procedures, COBRA rights and a statement of ERISA rights.
When Employees Must Receive It
New participants generally get the SPD within 90 days, and changes are communicated through a summary of material modifications on a set schedule.
The Wrap Document Fix
A wrap document fills the gaps a carrier booklet leaves, so the carrier materials and the wrap together form the plan document and SPD.
Requests for Plan Documents
When a participant asks in writing, the administrator has 30 days to respond or may face a daily penalty.
Keeping the SPD Current
Plan changes, new carriers and new eligibility rules mean the SPD and its updates need a review each year.
Summary plan description questions, answered.
Plain answers for HR, finance and deal teams.
What Is a Summary Plan Description?
A plain-language document that describes a plan’s eligibility, benefits, costs, claims procedures and participants’ rights. ERISA requires it for covered employee benefit plans.
Is My Carrier’s Benefit Booklet an SPD?
Usually not. Carrier certificates seldom include all the items an SPD must contain, such as the plan administrator, agent for service of process and the ERISA rights statement.
What Is the Difference Between the Plan Document and the SPD?
The plan document is the legal instrument that governs the plan. The SPD summarizes it for participants. Both should exist and agree.
How Soon Must a New Employee Receive the SPD?
Generally within 90 days after becoming a participant. Your counsel confirms how that applies to your plan.
What Is a Summary of Material Modifications?
A notice describing a plan change. For most changes it is due within 210 days after the end of the plan year in which the change was adopted, and sooner for a material reduction in covered services.
What Happens if We Do Not Have an SPD?
Participants may ask for one, and an administrator who fails to provide requested documents within 30 days can face personal liability of up to $100 a day under the statute.
Who Is Responsible for Providing It?
The plan administrator, usually the employer unless the plan names someone else.
Do Small Employers Need an SPD?
If the employer sponsors an ERISA plan, yes. Some arrangements fall outside ERISA, so the answer depends on the plan. Counsel can confirm.
Can You Prepare the SPD for Us?
We organize the benefits information and coordinate a wrap document with your counsel or a document provider. We do not give legal advice.
Where Do We Start?
Send us your carrier booklets and any plan documents you have, and we will show you what is missing.
Ready? Upload your renewal, or talk it through with someone first. No cost, no obligation.
General information about summary plan descriptions, not legal or tax advice. Plan-specific questions belong with your counsel and tax advisor, and we will bring them in.
The Rules Behind Plan Documents.
The laws named on this page link to the statute or regulation they come from. This is general information, not legal advice, and rules change, so check the current text and ask your counsel.
Required Contents of an SPD (29 CFR 2520.102-3)
Lists what a summary plan description must contain and how it must be written for participants.
When Plans Must Furnish Documents (29 U.S.C. 1024)
Sets when the plan administrator must give participants the SPD and updates.
Penalty for Not Providing Requested Documents (29 U.S.C. 1132)
Covers the civil penalty when an administrator does not provide requested plan documents.
Related reading on plan documents.
Compliance Overview
The page this belongs to.
ERISA Compliance Checklist
The full section.
Plan Document Requirements for Cafeteria Plans
A related document most employers need.
Related reading: Summary of Benefits and Coverage (SBC)
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The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents, two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
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