What is a Summary Plan Description?

If you receive healthcare benefits from your employer, you should have access to a Summary Plan Description (SPD). In a nutshell, the SPD provides important details about your company’s benefits plan and how it works. Required by law, the SPD defines when employees become eligible to participate in the plan, how benefits are calculated and paid, how to submit claims, when benefits are fully guaranteed, and more. Here’s a breakdown about the ever-important Summary Plan Description.

What is a Summary Plan Description?

A Summary Plan Description is a document that employers must provide at no charge to employees who participate in Employee Retirement Income Security Act (ERISA)-covered retirement plans or health benefit plans. 

Health benefit plans include Flexible Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs), and Health Savings Accounts (HSAs).

Where do I get a Summary Plan Description?

Within 90 days of your hire date, you should receive an SPD covering your new employer’s healthcare and retirement benefits. You may receive the document electronically or as a hard copy. If you only receive an electronic copy, you can request a written version.

If you need a copy of the SPD, contact your benefits plan administrator or HR department.

What’s included in the SPD?

The SPD should be written in clear, simple language that all employees can understand*. It must include:

• Plan name and IRS number
• Employer’s name and address
• Plan administrator’s name and contact information
• ERISA disclosures
• Guidance on how employees can file a grievance or an appeal
• Statement of Health Insurance Portability and Accountability Act (HIPAA) rights

*If 10 percent or more of a company’s employees speak a language other than English, the SPD must be published in those other languages too.

A Summary Plan Description Should Fully Answer Your Benefits Questions

Read your company’s SPD carefully to learn more about:

• Plan eligibility requirements, such as minimum age and service requirements
• When does the plan year begin and end?
• Who makes contributions to the plan? Employee? Employer?
• Does the plan include consumer directed healthcare benefit accounts?
• For retirement plans, does it allow for rollover contributions from other plans?
  • Can I roll my 401(k) from a previous employer over into this plan?
• For retirement plans, how are employer and employee contributions invested?
• When do I become vested in the retirement plan?

• Can I borrow from my retirement account?
• What happens to my benefits if I go on disability, leave the company, or die?

Consumer Directed Healthcare Accounts

If you have a Flexible Spending Account, Health Reimbursement Arrangement, or Health Savings Account, you will find the following (and more):

For FSAs:

• How much is the annual contribution amount?
• Who contributes?
• Is there an employer match?
• Does my FSA have use-it-or-lose it, grace period, or rollover?
• How do I submit a claim?

For HRAs:

• Which expenses are eligible?
• What are the reimbursement claim requirements, including limits?
• When is my account funded?
• Are my dependents covered?
• Do funds rollover?
• What happens when I retire?

For HSAs:

• How much is my high deductible health plan (HDHP) premium?
• How do I fund the HSA?
• Does my employer match contributions?
• Are there wellness incentives?
• Can I change contribution amounts in the middle of the plan year?
• How do I submit a claim?

Who is eligible to receive benefits?

The SPD should define specifically which employees are entitled to various benefits. It should also outline whether the benefits apply to independent contractors, temporary workers, spouses, domestic partners and children.

What happens when benefits change?

Companies may change their benefit plans from time to time. When a benefits plan is modified, the employer must notify all employees in writing. Employees should receive either a revised SPD or a Summary of Material Modifications (SMM) document that explains the changes.

The company must distribute the notification within 60 days of the change becoming effective if it reduces coverage or benefits. If the changes do not reduce coverage or benefits, the notification must be provided within 210 days after the end of the plan year in which the change became effective.

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If you have questions about your company’s benefits plan, contact your HR department or plan administrator for your free copy of the Summary Plan Description.