Human resource personnel may encounter summary plan descriptions (SPDs) for each health and welfare benefit plan available to employees. Employers must have SPDs that contain specific information, as the government mandates that these documents be provided to employees.
Following federal guidelines might seem simple, but there are several misconceptions that can affect many human resource managers. Employee benefit services can help clarify these, and will put to rest any questions or concerns HR professionals may encounter.
Check out the top 3 common misconceptions human resource supervisors face with SPDs.
1. SPDs are not Certificates of Insurance – Despite what many HR staff members might believe, SPDs and Certificates of Insurance are different. SPDs contain language from the Employee Retirement Income Security Act (ERISA) – a federal regulation that governs both health and welfare plans.
Meanwhile, a Certificate of Insurance is issued by insurance carriers to provide information about the existence of coverage, but does not include ERISA approval. SPDs include Certificates of Insurance, but the two are not mutually inclusive.
2. Filing a Form 5500 – Many human resource managers believe that businesses with less than 100 participants are exempt from filing a Form 5500. However, as this document is a valuable compliance, disclosure and research tool for the government, it is mandatory regardless of the number of plan participants.
Thankfully, employee benefit consultants offer assistance with Form 5500, and can teach HR staff members about this and other federally mandated documents.
3. SPD responsibility – Businesses might think that insurance carriers or brokers are responsible for preparing, filing and delivering SPDs. However, the responsibility falls on employers, as they must ensure that the plans comply with federal regulations.
Employee benefit services can help human resource managers clear up misconceptions relating to SPDs and other employee benefit plan topics.
