BASE^® Blog

The Employee Retirement Income Security Act (ERISA) is a federal law to protect employees participating in employer-sponsored benefit plans.  Despite the fact that ERISA is required, there are several myths and common misconceptions around ERISA making it difficult to understand. 

ERISA was designed to protect employees and mandates that health plans must be in writing.  The Summary Plan Description and Plan Documents fill in the gaps of other documentation to help comply with federal regulations. 

The BASE® ERISA Wrap is designed to wrap around existing certificates of insurance and benefit plan booklets to provide the required provisions and information and protect the plan and the employer from steep penalties and fines. 

MISCONCEPTION:  Plan Documents are optional.

It is a common misconception that Plan Documents are optional, but ERISA has strict requirements for these types of documents.  Many employers mistakenly assume that insurance contracts, certificates of insurance and benefits summaries fulfill the ERISA requirements for a Summary Plan Description (SPD) and Plan Documents, but they don't include the required or recommended provisions that protect the plan and the employer.

MISCONCEPTION:  Carrier documents are all that employers need to be in compliance.

Compliance gaps present a real problem for employers without the proper documentation in place.  Carrier documentation lacks some required information, including:

• ERISA plan numbers
• Plan Administrator (Employer or Carrier)
• If employer is part of the Pay or Play Provision of the Affordable Care Act
• Grandfathered Disclosure, which must be included if medical plan still grandfathered

 MISCONCEPTION:  ERISA only applies to very large companies.

Virtually all employers, regardless of size or number of participants should have an ERISA Wrap in place to satisfy federal requirements. ERISA applies to virtually all employer-sponsored benefit plans, regardless of size.  If one employee participates, ERISA applies. 

 The BASE® ERISA Wrap combats these misconceptions and delivers a solution with a customized Wrap SPD and Wrap Plan Document with the required ERISA provisions and information to achieve compliance.  To learn more about BASE® ERISA Wrap, contact BASE® at 888.386.9680 or visit www.BASEonline.com.

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