If your company offers medical, dental, vision, or other welfare benefits, your ERISA Wrap Plan Documents serve as the official rulebook. It outlines how your plan is run and ensures you’re meeting key disclosure requirements under the Employee Retirement Income Security Act (ERISA).
But this document isn’t “set it and forget it.” It needs regular attention to stay compliant.
When Do You Need to Update It?
Amendments are typically required whenever there is a material modification to the plan. Material modifications refer to any changes that could impact the rights or responsibilities of participants. Common examples include:
- Adding or terminating a benefit option
- Modifying eligibility requirements (such as waiting periods or employee classifications)
- Altering plan sponsor information
These updates must be shared with plan participants through a Summary of Material Modifications (SMM) within 210 days after the end of the plan year in which the change was adopted, or 60 days if the change significantly reduces benefits.
Best Practice: Restate Every 5 Years
Even if no material changes occur, restatements of the wrap plan document should occur at least once every five years. Why? ERISA regulations and guidance from agencies such as the Department of Labor (DOL) and the IRS are continually evolving, and your document should reflect that. A regular restatement helps ensure your plan stays aligned with current laws, operational practices, and reporting requirements.
What Happens if You Don’t?
Failure to keep plan documentation up to date can result in significant consequences. These may include compliance violations and increased scrutiny during audits. An outdated or inconsistent document can also create confusion for plan participants and expose the employer to legal risks.
In summary, ERISA Wrap Plan Documents must be amended when there are material modifications to the benefits or structure of the plan, and they should be restated at least every five years to ensure compliance with evolving legal and regulatory standards. Staying on top of your ERISA Wrap Plan Documents helps protect both the employer and its employees by ensuring transparency, consistency, and adherence to legal requirements.
