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when is an SPD too big


Guest ERISAQuestioner

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Guest ERISAQuestioner

I'm updating a Plan/SPD for a self insured health and welfare plan. It's grown considerably and in addition to medical vision and drug benefits, also offers insured life insurance and long term disability benefits. This is going to be a huge SPD/Plan.

Can we just use booklets provided by the life insurance and long term disabilty provider as 'breakout' SPDs to save printing costs and just reference them from the big SPD/Plan? Incorporation by reference--is that permissible?

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Take a look at what 4 U.S. Senators have to say about SPD length on page 3 of the attached letter, under "Notice to Participants".

Also, here's a case that found that the SPD need not detail every method under which an early payment option might be available under a plan. McCarthy v. Dun & Bradstreet Corp., 2d Cir., No. 05-3828-cv, 3/29/07.

Not directly answering your question--I think the length would depend on the provisions of the specific plan at issue--but something for you to 'chew on'.

John Simmons

johnsimmonslaw@gmail.com

Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.

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The regs imply that an SPD must be contained in one document. See the flush language after ERISA Section 104(b)(1), which requires plan amendments to be consolidated every 5th year into "an updated summary plan description". In fact, if different benefits are provided to different groups of employees, then "the administrator may fulfill the requirement to furnish [an SPD] by furnishing to each member of each class of participants a copy of a summary plan description appropriate to that class." (Treas. Reg. Section 2520.102-4.)

However, I can find no specific rule that states it must be only one document.

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ERISAQuestioner,

It might be too long if its length alone causes an employee not to read it. After all, there is a readability standard.

Seriously, as your question relates to a H&W plan, it likely might include health coverage and be very long. You might consider having eligibility, entry, elections, employer payment of coverage costs, claims procedures, ERISA identifying procedures, WHCRA and other notices you might choose to imbed in the SPD up front, with the description about what types of health procedures are covered, with what co-pays and 'co-insurance' responsibilities be attached in an addendum to the main body of the SPD. That way perhaps the main body (relatively short) has a greater chance of being read, and the addendum used by employees as a reference much like using an encyclopedia.

John Simmons

johnsimmonslaw@gmail.com

Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.

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Guest ERISAQuestioner
The regs imply that an SPD must be contained in one document. See the flush language after ERISA Section 104(h)(1), which requires plan amendments to be consolidated every 5th year into "an updated summary plan description". In fact, if different benefits are provided to different groups of employees, then "the administrator may fulfill the requirement to furnish [an SPD] by furnishing to each member of each class of participants a copy of a summary plan description appropriate to that class." (Treas. Reg. Section 2520.102-4.)

However, I can find no specific rule that states it must be only one document.

Thank you for your ideas. I think another way to shorten it a bit would be to recommend breaking the document into two: a Plan and and SPD, instead of combining them in one document.

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Guest ERISAQuestioner
ERISAQuestioner,

It might be too long if its length alone causes an employee not to read it. After all, there is a readability standard.

Seriously, as your question relates to a H&W plan, it likely might include health coverage and be very long. You might consider having eligibility, entry, elections, employer payment of coverage costs, claims procedures, ERISA identifying procedures, WHCRA and other notices you might choose to imbed in the SPD up front, with the description about what types of health procedures are covered, with what co-pays and 'co-insurance' responsibilities be attached in an addendum to the main body of the SPD. That way perhaps the main body (relatively short) has a greater chance of being read, and the addendum used by employees as a reference much like using an encyclopedia.

Thank you for your ideas. As I also stated, I might recommend breaking the SPD and the Plan document into two, which could make things less bulky.

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