What Is an ERISA Wrap Document and Why Small Businesses Need One

Executive overview

ERISA requires employers of all sizes to provide employees with a Summary Plan Description (SPD) for every covered benefit plan. Writing compliant SPDs from scratch is costly and complex. A WRAP document supplements existing carrier plan booklets to meet the SPD requirement — often covering multiple plans in a single document.

One WRAP document can satisfy the SPD requirement for multiple benefit plans at once, cutting admin burden significantly.

What ERISA covers

• Federal law protecting employees enrolled in employer-sponsored benefits
• Applies to employers of all sizes — unlike ACA requirements
• Covers major medical, dental, vision, prescription, FSAs, HSAs, and similar plans
• Excludes pensions and government or religious institution plans

SPD requirements

• Must be provided within 90 days of coverage start date
• Must include plan name, contact info, benefits, claims procedures, and ERISA rights
• Must also cover premiums, deductibles, co-pays, network info, pre-certification, QMCSO procedures, and HIPAA notices
• Plan documents from carriers are too complex to serve as SPDs — plain language is required

How WRAP documents work

• Supplement the carrier's policy or booklet, filling gaps to meet federal requirements
• Can wrap around multiple plans (e.g. dental and vision) under one umbrella document
• Reduce cost and burden of filing multiple annual reports such as Form 5500
• Benefits brokers can help create WRAP documents — no need to figure it out alone