What Is A Wrap Document?
A wrap document is where all of the information about an employer’s insurance benefits is kept. It incorporates, or “wraps” around additional documents that provide further details.
If your employee benefits open enrollment took place recently, (more benefit plans renew on January 1 than at any other time), you either:
- received a large and impenetrable document called a “Wrap Document,” or
- You should have received a large and impenetrable document called a “Wrap Document,” but didn’t.
It’s no secret that the laws and regulations regarding employment, labor, benefits, etc. have grown long and complex, largely from having grown over the years as well-meaning legislators and regulators have seen injustices or inequities and crafted rules specifically to stamp those out. With almost all of these rules, it also has become the legal responsibility of the employer to notify the employees of their specific rights under those rules.
How many rules and regulations are we talking about?
Small to mid-sized employers are responsible for complying with components of:
- Health Insurance Portability and Accountability Act (HIPAA)
- Fair Credit Reporting Act
- Fair Labor Standards Act
- Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA)
- Immigration Reform and Control Act (I-9 Requirements)
- National Labor Relations Act of 1935
- Employee Retirement Income Security Act (ERISA)
- Equal Pay Act of 1963 and the Lilly Ledbetter Fair Pay Act of 2009
- Occupational Safety and Health Act of 1970
- Title VII of the Civil Rights Act of 1964
- Americans with Disabilities Act of 1990 and Americans with Disabilities Act Amendments Act of 2008
- Pregnancy Discrimination Act
- Age Discrimination in Employment Act (ADEA)
- Genetic Information Nondiscrimination Act (GINA)
- Drug-Free Workplace Act
- Consolidated Omnibus Budget Reconciliation Act (COBRA)
- Medicare Secondary Payer Rules (enforced through the Social Security Act)
- Family & Medical Leave Act (FMLA)
- Mental Health Parity Act and Mental Health Parity and Addiction Equity Act
- Patient Protection and Affordable Care Act (ACA)
That’s a lot of regulations — and more importantly for the topic at hand, that’s a lot of notifications. A Wrap Document is a single document which “wraps up” all of the individual notifications into one bundle, allowing the employer to satisfy all of those notification requirements at once.
Employee Retirement Income Security Act of 1974
ERISA regulations specifically require employers to provide a “Summary Plan Description” (SPD) to employees/plan participants within 90 days of the date when (a) the benefits plan changes, (b) the employee becomes eligible for employer-sponsored benefits, or (c) the plan renews, usually annually. When the Wrap Document is provided to employees together with the Summary of Benefits and Coverage (SBC), which is the government-mandated format for explaining medical benefits, or with a summary description of other employer-sponsored benefits, it constitutes the SPD and fulfills that requirement.
But wait! What constitutes “providing” the SPD to employees? It can’t be simply tacked to the bulletin board in the break room, or posted to a company intranet to which employees have access. Employers need to either give a physical copy to each employee of the Wrap Document and SBC for each plan, or email electronic versions to them, provided that the employee has an employer-provided work email address which the employee uses regularly as part of his/her job duties. A workaround for the second option, is that an employee can sign a paper form giving the employer permission to send electronic versions to the employee’s personal email to fulfill notification requirements.
If You Didn’t Receive A Wrap Document
You should bring this to the attention of your employer, who is likely unaware of either the need for distribution of Wrap Documents, or of the serious fines which can accrue if the Department of Labor randomly chooses them for an audit.
Encore Benefits provides updated Wrap Documents and all supporting documents annually as a courtesy to assist our clients in their ERISA and other regulatory compliance.