All health and Welfare Plans must be maintained according to a “written instrument” under ERISA. This instrument is the Plan Document. For each plan maintained there must be a separate ERISA Plan number, such as 501, 502, etc. Any and all welfare benefits can be combined into one plan. Alternatively, the plans can be maintained separately but each plan maintained requires the filing of a 5500. Each plan must provide each participant with a Summary Plan Description, which is summarized version of the Plan Document. All benefits can be combined into a single plan document, which would require one plan number for all benefits and the filing of one 5500, as opposed to multiple.
Since welfare plans are simpler than other plans such as pensions, the Plan document and SPD can typically be combined into a single document. Although there are no specific requirements for what has to be included in welfare Plan Document, the DOL has a large list of what must be incorporated in the SPD, which is the reason why these documents are usually combined.
Generally, employers base their decision on the type of benefit (fully insured vs. self-funded). Fully-insured plans have their claims and appeals procedures handled by the Insurer who makes all decisions. Self-insured benefits usually have the claims administrator make the initial determination and the Plan Administrator is responsible for the 2nd level decisions. Again this is why many employers choose to combine all of their insured benefits into a single document, also the claims procedures and funding are identical for all the benefits and it is easily described within the SPD. For clients who also have an FSA, it may be beneficial to leave the benefit as a stand-alone plan, meaning it would have its own plan number and SPD, since the claims procedure and funding are different. Additionally, with Flexible Spending Accounts there are frequently less than 100 participants, so filing a Form 5500 would not be required.
During an audit, the DOL/IRS look to see that the SPD has the required language, which are detailed in the Regulations. If applicable, they check to see that a Form 5500 has been filed, as well as verifying the proper distribution of the SPDs. The combined Plan Document/Summary Plan Description that ERISA Documents Inc. provide adheres to the current SPD requirements. Employers are allowed to issue separate plans with seperate SPD’s, but because the language is repetitive, a single document is typically the popular method.
