Yes technically—but most employers use a wrap document to bundle all benefits into one ERISA plan. It simplifies compliance, documents, and 5500 filings.
ERISA
ERISA sets standards for retirement and health benefit plans in private industry to protect individuals in these plans. The law was passed in 1974, but it is still applicable today as it creates compliance requirements for employers of all sizes that offer group health insurance benefits, particularly egarding plan management and employee communications. Some employers choose to purchase an “ERISA Wrap” document from a third-party administrator (TPA) to make sure they are in compliance with the ERISA law.
Does ERISA apply to voluntary benefits?
If the employer contributes or promotes the benefit, ERISA likely applies. But if employees pay 100% and the employer stays hands-off, the benefit may be ERISA-exempt.
What are the penalties for not complying with ERISA?
Missing ERISA documents like SPDs or 5500s can lead to penalties of up to $110 per day—or more. Non-compliance may also trigger a DOL audit.
What is a Wrap document and do I need one?
A wrap document bundles your benefit plans into a single ERISA-compliant plan. It satisfies documentation requirements and is highly recommended for any employer offering group health or welfare benefits.
Are small employers exempt from ERISA requirements?
No. ERISA applies to private employers of any size offering group health or welfare plans—even those with just one employee. There’s no small-business exemption under the law.
What are an employer’s responsibilities under ERISA?
Employers must provide plan documents, distribute SPDs, act in participants’ best interests, follow plan rules, and provide required notices. Large plans may also need to file Form 5500 annually.
What documents are required under ERISA?
Employers must have a formal plan document and provide a Summary Plan Description (SPD) to participants. Larger plans may also need to file Form 5500 with the government.
Which employers are subject to ERISA?
ERISA applies to most private-sector employers that offer health or welfare plans. Government and church employers are generally exempt, but there’s no small-business exemption under ERISA.
What is ERISA and how does it apply to health plans?
ERISA is a federal law that governs most private employer health plans. It sets rules for plan documents, disclosures, and fiduciary duties to protect employees’ benefits.