The Employee Retirement Income Security Act of 1974 is a federal law that sets minimum standards for many private-sector retirement and healthcare plans. The law, which is enforced by the Department of Labor (DOL), protects employees who are enrolled in employer-sponsored benefits.

An ERISA wrap health & welfare plan document is an additional document to the insurance policy, coverage cert, or plan booklet that carriers provide. It fills in the gaps necessary for federal regulations.

Although most insurance companies and third-party administrators are able to provide information about policy and coverage to conform to state regulations, they often do not have all the information required to comply with federal ERISA requirements.

Employers, rather than insurers, carry the obligation for ERISA compliance as fiduciaries. To be clear, a plan paper or booklet cannot always serve as the SPD for a plan. An SPD should describe a plan's details in more intelligible words, whereas a plan document is frequently extensive and written in thick legal language. 

An SPD must also be given to participants, although a plan document does not. Wrap documents can be used to consolidate several employer-sponsored benefits programs into a single "umbrella," reducing the administrative complexity and cost of filing and disseminating various annual reports, such as Formula 5500.

Large companies may have the knowledge, time, and resources to produce SPDs for all of the plans they sponsor. Small enterprises, on the other hand, lack the manpower and resources to develop individual documentation on demand for each participant and stay abreast of changing requirements.

An ERISA wrap document makes compliance easier and saves money. It will be considerably easier with the help of a competent benefits administrator.