All Insights

Common Summary Plan Description (SPD) Mistakes

  • Group Benefits and Retirement
  • HR Compliance
  • by Arman Vahdatinia
  • on Jul 11, 2021

Subject to ERISA (Employee Retirement Income Security Act) the SPD (Summary Plan Description) is one of the most important documents that participants under a health benefit plan must receive. The Department of Labor has increased its company audits, and more often than not employers are failing to provide their employees an SPD.

Some may consider the information distributed by their insurance carrier as sufficient evidence of coverage and benefits to satisfy their SPD distribution requirement. Unfortunately, this is not the case, and the responsibility lies solely in the lap of the plans administrator (the employer that sponsors the group plan).

Every employer that sponsors a group health plan must comply with this important ERISA requirement, or they run the risk of facing a hefty fine. Penalties of up to $120/day per participant or beneficiary for failing to provide an SPD or plan document within 30 days of receiving a request. The penalty accrues daily from the inception of the policy, not from the date of notification to furnish.

It is considered a best practice to distribute the SPD to employees and maintain proper records that each beneficiary has in fact acknowledged receipt. This can be accomplished by employing an online administration system that can track and organize specific notices, and ensure compliance under ERISA.

To learn more about how we can assist your company reduce its risk of an audit, and eliminate the risk of arbitrary penalties -please contact us via telephone or email.

Get in Touch
Connect with us to discuss how we can lighten your workload.
Newsletter Signup
Cookie Policy -

We use cookies to personalize and enhance your experience on our site. By using our site, you agree to our use of cookies, as well as our Privacy Policy and Terms of Use.