Wrap Plan Documents – The New Fundamental ACA Compliance Tool

1. Wrap Plan Documents – The New Fundamental ACA Compliance Tool

2. Reasons for an Employer to create a Wrap Plan Document and Distribute an SPD • Required by ERISA • Combines several benefit offerings into one plan for 5500 filing or other purposes • Allows employer to define elements that are often inconsistent or missing in certificates issued by insurance carriers • Allows employer to create plan features that the carrier will not document in insurance certificate ACA has made them more important than ever!!

3. Required by ERISA • Required by ERISA for ALL plans • Regardless of size or funding • But not plans that are exempt from ERISA – church and governmental plans • Informs participants and beneficiaries about their benefits, rights, and obligations under the Plan • ERISA requires that the plan documents include specific information • Statement of Rights • Plan Sponsor Name • Plan funding information

4. Required by ERISA • Distribution Requirements for SPD • Within 120 days of implementing new group health plan • Within 90 days of enrollment in plan • Within 210 days following the last day of the 5th plan year if SMM • Within 210 days following the last day of the 10th year if no SMM Plan document must be provided within 30 days of a request • Penalties • Up to $110 per day for failure to provide • Failure to have one does not invalidate the plan • Bigger concern is when documents issued do not accurately reflect the plan’s intent

5. Combine Several Benefit Options into One Plan • If subject to 5500 filing requirements, will allow employer to file only one 5500 (and will reduce penalties if filing is late or missed) • HRA/Medical Plan or Wellness/Medical Plan – Employer will want to have these plans combined so that you can limit COBRA on the HRA or wellness to those who elect COBRA on medical. • If the plans are separate, then participants have to be given a separate COBRA election

6. Create Consistent Plan Features and Add missing ones • Eligibility • Medical carriers often will not customize • ACA waiting period and eligibility details • Leave provisions – each insurer or administrator will define based on their own templates and preferences • Effective date and termination of employee and dependent coverage • Usually not consistent from carrier to carrier • Plan year • Not included in most carrier certificates • Needed to determine compliance date for most ACA requirements

7. Design Plan Features • Expand eligibility (with permission of carrier when insured or stop loss carrier if self-funded) • Limit eligibility • Spousal exclusion (and/or dependent) • Change wording to exclude those that do not comply with eligibility audit • Include wellness plan requirements • Add benefits or exclusions (with permission of carrier)

8. ACA • Increase in DOL Audits • Increase in provider initiated claims appeals • More items that need to be documented • Waiting periods • Eligibility • Notices

9. Questions? Comments? Polestar Benefits, Inc. 412 Jefferson Parkway, Suite 202 Lake Oswego, OR 97035 (855) 222-3358 www.polestarbenefits.com We are happy to help!