Are Wrap Documents a Legal Requirement under ERISA?

While most employers understand the requirements of the Employee Retirement Income Security Act (ERISA) as it applies to their retirement plans, such as pension, 401(k) and profit-sharing plans, some fall short when it comes to complying with ERISA for their health and welfare plans.


ERISA was designed to protect individuals enrolled in pension and health plans by private industry.


ERISA requires group health plans to have a written plan document in place and provide a summary plan description (SPD) to all eligible participants. The written plan document is the instrument by which the plan must operate. Whereas the SPD is an instrument used to notify the plan participants on the plan’s terms including eligibility, funding, contributions, and benefits.

So why a Wrap Document, isn’t the SPD enough?

Often employers will rely on their carrier or TPA to provide SPDs to their plan participants, often referred to as Certificates of Coverage. However, the carrier or TPA is not legally required to ensure that all proper ERISA language is included in those SPDs. It is the employer’s responsibility to comply with ERISA, not the carrier or TPA.

The benefit of a Wrap Document.

The wrap document combines all the SPDs/certificates of coverage from each carrier or TPA and creates one document.  The required ERISA language is then “wrapped” into that one document to form your wrap document or mega wrap as it is often referred.  Since this document now has all the required ERISA language, the result is one ERISA compliant SPD that you can now distribute to all eligible participants.

Fewer 5500 filings.

In addition to meeting the employers ERISA requirement to distribute an ERISA compliant SPD, it also has a second purpose. The wrap or mega wrap document essentially bundles all employer-sponsored plans into one single plan. Hence the employer can now file one Form 5500 rather than one for each benefit with 100 or more participants on the first day of the plan year.

So, while a wrap document is not a legal requirement it is clearly an aid to employers to meet their ERISA SPD obligation.

Houchens Insurance Group has the experience to create wrap documents for our clients. When benefits change, our inhouse staff can create an amendment to your wrap document or an entirely new wrap document at our client’s request.

This article was written by Maryellen Sweetman


Maryellen joined Houchens Insurance Group in July 2008 as our Wellness/Implementation Manager.  She is a Certified Human Resources Professional with 20+ years’ experience as a Human Resources Generalist for an International Fortune 500 Company. Maryellen is a Certified Corporate Wellness Coach and has experience creating and implementing successful wellness programs. She is also a licensed Health Insurance Agent, Human Resources Consultant and a Certified Healthcare Reform Specialist.  In her current role as Compliance Officer for Houchens Insurance Group, she is responsible for ensuring legal compliance with all federal and state labor laws, with special emphasis on ERISA, The Affordable Care Act, FMLA and the ADA to name a few.  Maryellen works with all of our agencies to assist their Human Resources staff in ensuring their legal compliance as it relates to benefits.