How should notification of changes to the types of benefits provided, carrier changes, and more be made?

Plan administrators generally must inform participants of the types of changes listed below either through a Summary of Material Modifications (SMM) or a revised Wrap SPD:

  • Changes to the types of benefits provided (e.g., adding or eliminating dental coverage);
  • Carrier changes;
  • Changes in insurance contract numbers;
  • TPA changes;
  • Participating Employer changes; or
  • Changes to eligibility rules.

You can generate a SMM using Wrap360's SMM Generator. To access Wrap360's SMM Generator, go to Notices & Tools > SMM Generator in the top navigation menu. However, if you elect to generate and distribute a SMM, keep in mind that the changes described in that SMM must be incorporated into the Wrap SPD within 5 years of the Wrap SPD’s effective date.

Alternatively, you can elect to revise and redistribute your Wrap SPD to reflect a change to your plan. To do this, you should update your General Plan Information to reflect that this is an "Amendment and Restatement of an Existing Plan" and you should edit the "Effective Date of the Plan" to reflect the date on which such revisions became effective. The Plan Year (including the Plan Year for the PCP documents) should remain the same.

Finally, your Wrap Plan Document must be revised as necessary and signed by an authorized officer of the employer.

If you have any questions about the nature of the changes being made, please consult a trusted attorney.

 How should participants be notified of changes to a Welfare Benefit Plan?

ERISA requires plan administrators to notify plan participants of material plan changes by either amending the SPD or preparing a Summary of Material Modifications (SMM) describing the change and distributing it to plan participants.

Under the ACA, group health plans and health insurance carriers are required to provide at least 60 days' advance notice to participants before the effective date of any material modification to the plan that would affect the content of the Summary of Benefits and Coverage (SBC) and that is not reflected in the most recently provided SBC. However, if the change occurs in connection with a renewal or reissuance of insurance contracts, then the 60-day rule is not applicable. 

If the 60-day advance notice rule does not apply, but there is a change that results in a "material reduction in covered services or benefits" for a group health plan, then participants have to be notified within 60 days after the modification is adopted.

If neither of the two above rules apply, the plan administrator has until 210 days after the end of the plan year to notify participants of the change. (While notification within 210 days after the end of the plan year would satisfy the legal requirements in this instance, it is generally not a good idea to wait this long when it comes to health and welfare benefits—it would be prudent to provide notification of any material modification as soon as possible.)

Please visit our "SMM Generator" section for more information. If you have specific questions regarding the nature of the changes being made, please consult qualified legal counsel.

Please Note: Wrap360 and its employees and officers are not permitted to offer legal advice. These FAQs are provided for general information purposes only. As the answers to specific questions may vary based on federal or state law, as well as on company documents for the issues in question, it would be prudent to consult knowledgeable benefits counsel for individualized guidance.