The Employee Retirement Income Security Act of 1974 (ERISA) mandates that every employee benefit plan be established and maintained according to a written plan document.

The written plan document must clearly identify certain information about the plan, including but not limited to the following:

  • The name, business address, and phone number of the plan administrator.
  • The person designated as agent for service of legal process.
  • Provisions relating to eligibility that might be specific to the employer (employee classes, waiting periods, etc.).
  • The named fiduciary who will have the authority and responsibility to administer the plan.
  • Procedures for amending and terminating the plan.
  • The source of plan contributions.
  • The plan number and plan year.
  • The allocation of responsibilities for operating the plan.
  • A statement of participant’s rights under ERISA.

Some employers believe that the insurance policy and coverage documents they receive from their insurance carrier satisfy the plan document requirement. While these documents will include a detailed description of benefits, they do not typically cover all of the written plan document requirements listed above.

wrap document is a document that “wraps” the insurance policy, coverage certificate, etc. while adding the additional required information. The benefits available under the plan continue to be governed by the actual insurance policy, while the wrap document supplements with the information necessary to comply with ERISA.


Employer Action Items:

  • It is an employer’s responsibility to distribute the wrap SPD within 90 days of the date an individual becomes a participant in the plan (usually this would mean “new hires” that come onto the plan for the first time).
  • The employer must also distribute the wrap document every 5 years if there have been changes, or at least every 10 years.
  • For brand new plans that have not been previously subject to ERISA, an SPD must be furnished to participants within 120 days of the plan’s effective date.
  • If material plan changes are made during the year, a Summary of Material Modifications (SMM) must be provided to participants within 210 days after the end of the plan year in which the change was made (usually this requirement can be handled by distributing new plan information every year during open enrollment).
  • The employer must also distribute the wrap document to the following individuals:
    • Former Employees (e.g., retirees & spouses/dependents of deceased retirees) that are covered under the plan;
    • COBRA Qualified Beneficiaries; and
    • Alternate Recipients under Qualified Medical Child Support Orders that are enrolled on the plan.
  • If an employer chooses to distribute the wrap SPD electronically, either via e-mail or posting it to the company intranet, employers must ensure that they provide employees with proper notice by following the Department of Labor (DOL) electronic disclosure rules.  The DOL rules govern who may receive electronic disclosures and the manner in which they must be furnished.
  • Employers should keep a copy of the wrap SPD for company records. It is recommended this document be kept for the life of the plan, or for at least 7 years.
  • Sequoia Clients only: Your client service manager will be reaching out to you within the first several months of the plan year to discuss finalizing your wrap SPD.



The penalty for failing to provide an ERISA-compliant SPD within 30 days of a written request, can be up to $110 per day, per request. Failure to provide an ERISA-compliant SPD to the DOL can result in a penalty of up to $152 per day, capped at $1,572 per request (adjusted for inflation).


Additional Information:

DOL Electronic Disclosure Rules


The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.

Joanna Castillo– Joanna is the Client Compliance Manager for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Joanna enjoys live music, college football, travel, and walking her dog in Golden Gate Park.