What Your Business Needs to Meet ERISA Compliance

by Mwbnews | Friday, Jun 23, 2017 | 80 views

Professionals ready to help regarding ERISA complianceIn reviewing whether your employees have the required compensations and benefits they need, it’s essential to go through the Employee Retirement Income Security Act of 1974—or commonly known as ERISA—to know if your business is complying with the law.

ERISA, hrserviceinc.com shares, is a federal law that regulates employer-sponsored group benefits. It’s primarily for the private industry, and almost all businesses, no matter the size, are subject to ERISA.

Here’s the quick guide:

Determining the Requirements

There are employers who incorrectly assume that the insurance policy, coverage certificate or plan booklet suffices for a plan document requirement. These legal instruments, however, do not have the detailed information that ERISA requires.

Under ERISA, every employee welfare benefit plan should be specified and preserved in a written plan document, which includes:

  • The named fiduciary who is authorized to and responsible for administering the plan
  • The source of plan contributions
  • The updated procedures for modifying or terminating the plan
  • The distribution of duties for administering the plan between the employer and the third-party insurance carrier

Creating the Summary Plan

Aside from the plan document requirements, ERISA states that you must also prepare a comprehensive and up-to-date summary of the plan.

This document, or Summary Plan Description (SPD), is a detailed guide that informs employees what the benefits provide and how the plan works. Changes in the plan will require you to inform employees and furnish them with a revised SPD.

The SPD must have these important details:

  • The plan name, year, and number for annual reporting
  • The employer’s name, address, and employer identification number/federal TIN
  • The name, address, and telephone number of the plan administrator
  • The name and address of the plan’s agent
  • The source of plan contributions
  • Information about plan trustees
  • Elaboration of the claims procedure
  • Information about eligibility for plan participation
  • ERISA rights statement

Developing the ERISA Wrap Plan

You or your team may need additional expertise when collecting and organizing the information for these legal documents. You may consult with HR services companies that are familiar with these requirements and the processes so that you can prepare these documents with ease.

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