How is it determined if a benefit(s), like Wellness programs, critical illness plans, hospital indemnity or voluntary insurance plans, are to be included in a Wrap Document? Employers have flexibility in regards to what plans can be included in a wraparound/bundle plan. Usually an employer chooses to include all insured benefits within a single document and all self-insured benefits in a different document. However you do have the option to include them all in the same document, but if you decide to do this, it is necessary to include the claims procedure for both in the document as well. Many employers steer away from this option mostly because it can lead to a confusing document for participants.

The main differences between self-insured plans and fully insured plans are that fully insured plans use the Insurer’s claims procedures and reference readers to a certificate of coverage; meanwhile a self-insured plan actually describes the benefits in the SPD and uses internal claims and appeals procedure. There is no “wrong” choice, instead the decision is contingent on the benefits being offered. Commonly employers find it easier to keep insured benefits separate, however there is no reason to prohibit them from being combined.

The advantage of having a single plan as opposed to multiple, is that it creates a single plan year that applies to all benefits, and the administrator need only file one form 5500 (if they have over 100 participants).

Wellness programs can be considered health plans so long as they include medical services. Critical illness/ hospital indemnity plans are usually not ERISA plans unless the employer or administrator elects to actively sponsor them or to deduct the premiums on a pretax basis.

If the administrator or employer makes these plans available to employees, and does not actively endorse them (see next question), and collects post tax premiums, the employer can treat them as voluntary benefit plans and not be considered the plan sponsor. Nevertheless, if the employer wishes to indeed be the sponsor of these plans, there is a section for “other” insured plans where this can be added.

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