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.