Maintaining a plan document. All welfare plans must be memorialized in a plan document. Often employers fail to maintain an up to date plan document, believing that the group insurance policy and/or the insurer booklets are sufficient. For many reasons, those documents rarely are sufficient to satisfy the plan document requirements. However, a carefully drafted, reasonably short, plan document that doubles as a summary plan description (see below) is ordinarily sufficient to satisfy the plan document requirements.

Maintaining a summary plan description. A summary plan description (SPD) must be provided to all welfare plan participants. SPDs are important for explaining the rules of the plan in plain language, and for making a number of routine disclosures that are required by ERISA (such as disclosures under COBRA, HIPAA and other federal laws). For smaller and relatively simpler plans, the SPD and plan document can often be combined into a single document that serves both requirements.

Filing form 5500. For welfare plans covering over 100 participants, a Form 5500 must be filed with the U.S. Department of Labor. Welfare plans covering no more than 100 participants generally need not file a Form 5500, but only if benefits under the plan are provided solely through insurance or from the employer's general assets. Failing to file a Form 5500 in a timely manner will result in penalties and often unnecessary additional costs to prepare the late filings.

Other requirements may also apply, depending on the circumstances, such as obtaining a fidelity bond, distributing a summary annual report to participants, providing plan documents to participants on request and holding plan assets in a trust account.

How can Echelon help?
Echelon will advise you as to your responsibilities under ERISA as a welfare and/or pension benefit plan sponsor. Echelon will assist with drafting your plan's document and summary plan description, and assist with the preparation of the plan's annual Form 5500 if one must be filed.