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Slide 2: ERISA: Plan Documents and Form 5500 Reporting
ERISA: Plan Documents and Form 5500 Reporting March 20, 2025 Presented By: Matt Gerard and Cindy Niesen Brown & Brown Regulatory and Legislative Strategy Group
Slide 3: Disclaimer
DISCLAIMER Brown & Brown, Inc. and all its affiliates, do not provide legal, regulatory or tax guidance, or advice. If legal advice, counsel or representation is needed, the services of a legal professional should be sought. The information in this document is intended to provide a general overview
Slide 4: Presentation Agenda
Employee Retirement Income Security Act (ERISA) 1 Presentation 2 Plan Documents • Plan Document Requirements Agenda • Required and Suggested Content • Distribution Summary Plan Descriptions (SPDs) 3 • SPD Requirements • Required and Suggested Content • SPD Format • Distribution Requirements Wrap Doc
Slide 5: Employee Retirement Income Security Act (ERISA)
Employee Retirement Income 01 Security Act (ERISA)
Slide 6: ERISA Coverage
ERISA Coverage THE BASICS ERISA applies to Employee Pension Benefit Plans and Employee Welfare Benefit Plans sponsored by private sector employers including publicly traded and privately Employee Welfare Benefit Plan: held companies as well as nonprofit organizations Any plan, fund or program establ
Slide 7: ERISA Coverage
ERISA Coverage Applies to: Does not apply to: • Medical, surgical or hospital care • Workers’ compensation • Benefits for accident, disability, sickness or death • Payroll practices such as wage continuation • Unemployment benefits • Paid time off for vacation, holidays, military duty, • Funded vaca
Slide 8: Voluntary Safe Harbor
Voluntary Safe Harbor Coverage is voluntary, coverage is paid for 100% by employees, and employer does not engage in any of the following activities which constitute endorsement: • Select or negotiate with the insurer Examples: • Endorse the plan or associate the plan with employer’s • Individual fi
Slide 9: Plan Documents
02, Plan Documents
Slide 10: Plan Document
Plan Document PLAN DOCUMENT REQUIREMENTS ERISA §402(a) • Every employee welfare benefit plan must be established pursuant to a written instrument (i.e., plan document). » No form or format is prescribed by ERISA 402(a). » Plan Administrator is responsible for the plan document; typically, the employ
Slide 11: Plan Document: Required Content
Plan Document REQUIRED CONTENT • Named fiduciary and allocation of fiduciary duties • Procedure for allocation of fiduciary duties • Plan amendment and termination procedures • Claims procedures • Plan funding and payment provisions • Distribution of plan assets upon termination of the plan • For gr
Slide 12: Plan Document: Additional Suggested Provisions
Plan Document ADDITIONAL SUGGESTED PROVISIONS • Provisions corresponding to required content of SPD (e.g., benefits provided, eligibility requirements, etc.) • Discretionary authority • Use of plan assets to pay for administrative expenses • Rules restricting and regulating the use of Personal Healt
Slide 13: Plan Document: Distribution
Plan Document DISTRIBUTION • No general obligation to distribute • However, ERISA Section 104 provides: “The administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated Summary Plan Description (SPD), and the latest annual report, any terminal re
Slide 14: Summary Plan Description (SPD)
03 Summary Plan Description (SPD)
Slide 15: Summary Plan Descriptions: SPD Requirements
Summary Plan Descriptions (SPDs) SPD REQUIREMENTS ERISA § 102(a) requires a summary to be provided that explains the plan terms in a manner calculated to be understood by the average participant. • Plan Administrator is responsible for the SPD; typically, the employer/plan sponsor is the Plan Admini
Slide 16: SPDs: Required Content
Summary Plan Descriptions (SPDs) REQUIRED CONTENT (ERISA §102(B); DOL REG. §2520.102-3) • The plan name • Designation of any named fiduciaries, if other than the Plan Administrator, e.g., claims fiduciary • The Plan Sponsor/employer's name, address and EIN • The plan number for ERISA Form 5500 purpo
Slide 17: SPDs: Required Content
Summary Plan Descriptions (SPDs) REQUIRED CONTENT (ERISA §102(B); DOL REG. §2520.102-3) • The name and address of the plan's agent for service • How insurer refunds (e.g., dividends, of legal process, and statement that service may be demutualization) are allocated to participants made on Plan Admin
Slide 18: SPDs: Required Content
Summary Plan Descriptions (SPDs) REQUIRED CONTENT (ERISA §102(B); DOL REG. §2520.102-3) • Claims procedures, including applicable time limits • Source of Plan contributions (employer and/or and remedies available under the plan for claims employee contributions) (which are denied in whole or in part
Slide 19: Additional Requirements for Group Health Plan SPDs
Summary Plan Descriptions (SPDs) A D D I T I O N A L R E Q U I R E M E N T S F O R G R O U P H E A LT H P L A N S P D S • Detailed description of Plan provisions and exclusions: » Copays, deductibles, coinsurance, eligible expenses, network provider provisions, prior authorization and utilization re
Slide 20: Additional Requirements for Group Health Plan SPDs
Summary Plan Descriptions (SPDs) A D D I T I O N A L R E Q U I R E M E N T S F O R G R O U P H E A LT H P L A N S P D S Information regarding federal mandates: • COBRA • HIPAA • Women's Health Cancer Rights Act • Newborns’ and Mothers’ Health Protection Act • Qualified Medical Child Support Orders •
Slide 21: SPDs: Optional Content
Summary Plan Descriptions (SPDs) OPTIONAL CONTENT Disclosure regarding the fiduciary’s discretionary authority to interpret plan Language indicating that in the event of a conflict between the Plan Document and the SPD, the Plan Document controls Rules regarding overpayments and erroneously paid ben
Slide 22: SPDs: Language Assistance Requirements
Summary Plan Descriptions (SPDs) L A N G U A G E A S S I S TA N C E R E Q U I R E M E N T S SPD does not have to be in a language other than • Provide participants literate only in non-English English; however, the plan sponsor may have to language with an English-language SPD and a notice provide a
Slide 23: SPDs: General Distribution Requirements
Summary Plan Descriptions (SPDs) GENERAL DISTRIBUTION REQUIREMENTS • SPD and any Summaries of Material Modifications (SMMs) that are not incorporated into the SPD must be distributed to participants » Under ERISA “participants” are the covered employees; spouses and dependents are “beneficiaries” no
Slide 24: SPDs: Required Distribution Timing
Summary Plan Descriptions (SPDs) REQUIRED DISTRIBUTION TIMING SPD must be distributed: • Within 30 days of a request by a participant or beneficiary • New Plans – within 120 days after the effective date of plan • New Participants – within 90 days after participant first becomes covered • Existing P
Slide 25: Summaries of Material Modification (SMMs)
Summaries of Material Modification (SMMs) REQUIRED DISTRIBUTION TIMING • Upon any modification in the terms of the Plan that is “material” and any change in information required in the SPD » Can be accomplished through an amended and restated SPD or a Summary of Material Modification (SMM) » Must be
Slide 26: SPDs and SMMs: Distribution Methods
SPDs and SMMs DISTRIBUTION METHODS Must be furnished in a way “reasonably calculated to ensure actual receipt of the material” using method “likely to result in full distribution.” • Important to retain records demonstrating distribution • First-class mail to last known address of SPD • Electronic D
Slide 27: SPDs and SMMs: Distribution Methods
SPDs and SMMs DISTRIBUTION METHODS • Safe harbor for electronic distribution » Electronic disclosures permitted without prior consent to participant: (1) who has the ability to effectively access documents furnished in electronic form at any location where the participant is reasonably expected to p
Slide 28: Electronic Distribution Prior Consent Requirements
SPDs and SMMs ELECTRONIC DISTRIBUTION PRIOR CONSENT REQUIREMENTS • Affirmative consent required; negative consent insufficient • Consent must be provided or confirmed electronically in a manner that reasonably demonstrates the individual's ability to access information in the electronic form that wi
Slide 29: Consequences of Failure to Distribute
SPDs and SMMs C O N S E Q U E N C E S O F FA I L U R E TO D I S T R I B U T E • No specific monetary penalties unless the participant or beneficiary has requested copy • Potential criminal penalties for “willful violations” • Courts might base decisions on other document (e.g., enrollment materials,
Slide 30: Wrap Documents and Wrap SPDs
04 Wrap Documents and Wrap SPDs
Slide 31: Wrap Documents: What Is a Wrap?
Wrap Documents W H AT I S A “ W R A P ? ” • A wrap is used to fulfill one or more plan document obligations imposed by ERISA • The term “wrap” is made up » You won’t find it in the rules and regulations » It is referenced in the Form 5500 instructions • “Wrap” is used to describe a number of differe
Slide 32: Wrap Documents: Types
Wrap Documents TYPES Consolidated Wrap (aka “5500 Wrap”) Wrap SPD • Wrap document combines multiple policies/lines of • Incorporates multiple benefit summaries and carrier coverage into a single ERISA welfare benefit plan certificates by reference into a single plan SPD to » Fulfills requirement for
Slide 33: Wrap Documents: Types
Wrap Documents TYPES Required Information Wrapper (Mini-Wrap) • Wrapper plan document incorporates policy and certificate to create ERISA welfare benefit plan » Fulfills requirement for establishment under a “written instrument” as required by ERISA and § 105 (i.e., self-funded plans) Wrapper SPD •
Slide 34: SPDs for Wrap Plans
SPDs for Wrap Plans Why use separate wrapper SPDs instead of a single document that can act as an SPD for all ERISA benefits? It’s about distribution and eligibility. • If an organization doesn’t qualify for electronic distribution of SPDs, printing and mailing a single wrap SPD for all ERISA benefi
Slide 35: "Mega" Wrap
“Mega” Wrap Using a single document that operates as both the Plan Document and SPD (often referred to as a “Mega” wrap). • ERISA defines the SPD as a plain language summary of the information contained in the plan document » It remains unclear whether this is a viable option as it’s unclear whether
Slide 36: Form 5500 Reporting Requirements
05 Form 5500 Reporting Requirements
Slide 37: ERISA Reporting Requirements: Form 5500
ERISA Reporting Requirements: Form 5500 In General • Plan sponsors subject to ERISA are generally required to file an annual Form 5500, subject to certain exceptions. Form 5500 is an annual information report that is submitted to the US Department of Labor’s Employee Benefits Security Administration
Slide 38: When is Form 5500 Required?
When is Form 5500 Required? A form 5500 is required for: • Qualified retirement plans (such as a 401(k), 403(b) or pension plan) • Single employer health and welfare benefit plans: » Maintained for the benefit of employees of a single employer (IRC § 414 controlled group rules apply) » Consisting of
Slide 39: Specific Reporting Requirements
Specific Reporting Requirements Single Employer Plans Multiple/Multi Employer Plans Form 5500 is required when there are at least 100 • M-1 is required when health care benefits are participants1 at the beginning of the plan year for: provided AND there is <25% common ownership between participating
Slide 40: Specific Reporting Requirements: Funded Plans
Specific Reporting Requirements Funded (Trust) Plans • Trust Types: » Non-Taxable Voluntary Employee Beneficiary Association (VEBA) » Taxable Welfare Benefit Plan Trust • Plan assets may only be used for exclusive benefit of participants and beneficiaries • No small employer exception • Required rep
Slide 41: What Constitutes a "Plan"?
What Constitutes a “Plan”? Wrap Plan Separate Plan(s) • Welfare benefits incorporated into a consolidated • If there is no wrap: wrap ERISA welfare plan may be filed on one Form » All policies or separate contracts providing the 5500: same type of benefit (e.g., medical) may be » Must have adopted w
Slide 42: Form 5500 Filing Process
Form 5500 Filing Process • All 5500s must be submitted electronically to EBSA via EFAST2 » Designated filing signer is required on behalf of Plan Administrator » Second filing signer may be designated to sign on behalf of Plan Sponsor, but same individual may fill both roles » Requires Login.gov acc
Slide 43: Summary Annual Reports
Summary Annual Reports Summarize annual Form 5500 Must be distributed to plan participants • Funding and insurance information • Due two months after 5500 filing deadline (including extensions, if applicable) • Basic financial information • Can be distributed electronically – if safe harbor or • Par
Slide 44: Form 5500 Deadlines and Extensions
Form 5500 Deadlines and Extensions General Form 5500 Annual Filing Deadline Last day of 7th month following close of plan year • Provides an additional 2-1/2 months to file Form 5500 • Extension application must be mailed to IRS, postmarked by general filing Form 5558 Extension deadline (2023 plan y
Slide 45: Form 5500 Reporting Calendar
Form 5500 Reporting Calendar ERISA Plan Year General 5500 Filing Deadline3 SAR Deadline Deadline with Extension4 Extended SAR Deadline 1/1-12/31 7/31 9/30 10/15 12/15 2/1-1/31 8/31 10/31 11/15 1/15 3/1-2/28 9/30 11/30 12/15 2/15 4/1-3/31 10/31 12/31 1/15 3/15 5/1-4/30 11/30 1/31 2/15 4/15 6/1-5/31 1
Slide 46: Enforcement
Enforcement Civil penalties Criminal penalties for intentional violations • DOL Penalties for failure to file Form 5500 • Up to $100,0000 for an individual • Statutory maximum (worst-case) penalty5 = $2,739 per day per late filing (no cap) • Up to $500,000 for an entity that is not an individual (e,
Slide 47: Correction Process (Unfiled/Late 5500s)
Correction Process (Unfiled/Late 5500s) Delinquent Filer Voluntary Compliance Program (DFVCP) • Retroactively file separate 5500s for each missed plan year, for each unique ERISA plan » May need to be corrected for several years and multiple benefits (plans) o Enforcement stopped if both of the foll
Slide 48: Correction Process (Incomplete/Incorrect 5500s)
Correction Process (Incomplete/Incorrect 5500s) Amended Return/Report • Typical Error Examples: » Identifying multiple employer plan as single employer, or single employer plan as multiple employer » Incorrectly identifying funded plan as unfunded, or filing funded (trust) plan without financial sch
Slide 49: Summary
06 Summary
Slide 50: Summary
Summary All ERISA employee welfare benefit plans should have a Plan Document & SPD This includes fully insured or self-insured plans A wrap document may be used to provide required ERISA information and to combine multiple plans into a single plan for Form 5500 filing purposes Ensure proper distribu
Slide 51: HRCI and SHRM Credits
HRCI and SHRM Credits This Program, ID No. 693537, has been approved for 1.00 HR (General) recertification credit hours toward aPHR , aPHRi , PHR®, PHRca®, SPHR®, GPHR®, PHRi and SPHRi recertification through HR Certification Institute® (HRCI®). Brown & Brown is recognized by SHRM to offer Professio
Slide 52: Thank You!
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