Flexible Spending Accounts, Health Reimbursement Accounts- Employee Benefit Administrator

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Wrap Plan

A Wrap Plan is an ERISA-compliant legal document that encompasses all of the required legal content for various employee benefit welfare plans sponsored by an employer. There are at least two main reasons to adopt a Wrap Plan. First, a company can file a single Form 5500 instead of multiple Form 5500s for each one of the plans subject to reporting and disclosure regulations. Second, having a Wrap Plan will clean up any potential ERISA plan document compliance issues. Many employers receive insurance company SPD’s and plan documents with no real guarantee that these documents are ERISA-compliant. That action almost forces the company to outsource these documents for certification.

The DOL Form 5500 filing requirement for welfare plans applies to employers with 100 or more employees at the beginning of the plan year. Filing one Form 5500 greatly reduces administrative time and costs. It is much easier to complete one Form 5500 with all the comprehensive participant and financial data and simply attach various Schedule A’s for each insured benefit and Schedule C’s for each uninsured benefit (e.g. – FSA,HRA, etc.). At the same time, an employer will undoubtedly save on auditing costs when such event is scheduled simply because the wrap document condenses all of the legal language into one document.

DOL (Department of Labor) audits often accompany requests for insurance company booklets (SPD’s) for the purpose of scrutinizing all of the legal language required for ERISA compliancy. These booklets often do not include all of the legally required language mandated by ERISA and HIPAA, such as detailed claims procedures, plan sponsor information, HIPAA privacy rights, GINA provisions, ERISA rights provisions and others. A Wrap Plan simply eliminates this problem altogether.

Medcom, Inc. utilizes ERISA-compliant documents to grant assurance to each plan administrator with the security of knowing we care about employee benefit mandates. Why not give us a call?