By April Handlir, EHD Compliance Specialist
All ERISA-based group health plans, regardless of size and funding, must provide a Summary Plan Description (SPD) to participants. An SPD is a written document that outlines essential plan information, including administration, participant eligibility, processing of Qualified Medical Child Support Orders (QMCSO), cost-sharing, benefit limitations, applicable regulatory acts, provider networks, COBRA, terminations, claims, and pre-authorization parameters. The purpose of the SPD is to offer a clear and concise reference for participants.
The timing and recipients of SPD distribution can sometimes be confusing. The SPD must be provided to all current covered participants, COBRA participants, parents/guardians of those covered by a QMCSO, and dependents of a retiree plan when the participant is deceased. Dependents of covered participants or those not covered by the health plan do not need to receive a copy. For new participants, the SPD should be provided within 90 days of their effective date. For new plans, the SPD must be distributed within 120 days of the plan’s effective date. Thereafter, the SPD should be distributed every five years if material changes were made and every ten years if no material changes were made. In both cases, the SPD must be provided within 210 days of the anniversary date. If there is a reduction in benefits outside of the plan’s open enrollment, a Summary of Material Modification (SMM) is required.
SPDs can be distributed electronically to participants’ work emails if they regularly access a work computer. The delivery should include an explanation, the option to request a paper copy, and a read/return receipt. If the participant does not have a work email or designated workstation, prior consent is needed to use a personal email. All communications should be documented.
If the SPD is not available or not provided upon request, the Department of Labor (DOL) penalty is up to $110 per day per participant complaint. If the DOL requests the SPD and it is not provided, the penalty is $156 per day, up to $1,566 per request.
