Health Insurance Summary Plan Descriptions: Fact or Fiction

From ChamberChoice

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for established retirement and health and welfare plans in private industry to provide protection for individuals in these plans. ERISA requires plans to disclose certain material, including reports, statements and documents to participants and beneficiaries. One of the most important documents participants must receive when becoming covered under a health plan subject to ERISA is a summary of the plan document, referred to as the Summary Plan Description (SPD).

The SPD is probably one of the most misunderstood ERISA required disclosure documents. This misunderstanding can put an employer subject to ERISA at risk to costly problems and potential penalties. This article addresses some of the misunderstandings that some employers maintain regarding the SPD.

The information provided by insurers is an SPD: Fact or Fiction?

Fiction: The Department of Labor considers the SPD as one of the most important documents required by ERISA. Its importance stems from its role as being the primary informational document provided to participants to inform them of their rights and obligations. The SPD describes how the plan works, what benefits the plan provides, how the plan is funded, and how the benefits are obtained. While the Certificate of Coverage, Benefit Booklet, or Summary of Benefit that an insurer provides may meet some of the required information in an SPD, such as covered or non-covered benefits, it does not include all of the required provisions that must be included in an SPD. Some of those provisions are information regarding the plan sponsor/plan administrator, participation and termination requirements and a participant’s ERISA rights. Therefore, if just providing these insurer’s documents an employer will not be compliant with meeting the SPD requirement.

The SPD must actually be distributed to plan participants: Fact or Fiction?

Fact: Many employers mistakenly believe that the SPD only must be made available upon request. However, every plan participant who is entitled to benefits under the employer’s plan subject to ERISA is entitled to receive an SPD. The SPD must be distributed in a manner reasonably calculated to ensure actual receipt by plan participants. Therefore, the most acceptable means of delivery would be hand delivery or first class mail. Second or third class mail is acceptable if return and forwarding postage are guaranteed. An employer should always maintain documentation of who received the SPD. Therefore, merely posting the document or leaving it in a location where it can be picked up is not enough.

An employer can also deliver the SPD electronically, as long as certain DOL electronic delivery requirements are satisfied. Electronic delivery of documents can be by email or by attachment to email, use of a company website for posting of documents, and provision of documents on magnetic disk, CD-ROM, or DVD. The key issue remains, even with electronic delivery, the plan administrator must ensure actual receipt of the document. Some ways to ensure electronic receipt of an SPD would be to use return-receipt or notice of undelivered or unread email features, or conducting periodic reviews to confirm receipt. Other steps that must be taken by a plan administrator when delivering an SPD electronically are: notice must be provided to each participant at the time the document is provided of the significance of the document; and, the participant must be advised a paper copy will be furnished upon request.

My insurer, broker or Third Party Administrator is responsible for an SPD: Fact or Fiction?

Fiction: Under ERISA, the plan administrator is responsible for the SPD and any other disclosure requirements. This is true even where another party prepares or distributes the SPD and where that other party has contractually obligated itself to perform such services. Generally the DOL defaults to the plan sponsor, who is the employer, as the plan administrator. Thus, it stands to reason that the employer, and not the insurer, broker or TPA will be responsible for furnishing SPDs and will be liable for failure to furnish adequate SPDs.

There are consequences for failing to provide an SPD: Fact or Fiction?

Fact: There are no specific penalties in the statute or regulations for failure to prepare or furnish a required SPD. However, under the general enforcement provisions of ERISA, a participant may bring a suit against the plan administrator to enforce the requirement. Likewise, as part of a DOL investigation, the investigator is likely to require the plan sponsor to immediately produce and distribute any required but missing SPDs that are currently applicable. Furthermore, if a participant requests in writing to be provided an SPD, and the plan sponsor fails to provide it within 30 days, the plan sponsor may be charged $110 per day.

Finally, the greatest risk to a plan sponsor in failing to distribute SPDs arises when a participant makes a claim for a benefit based on a faulty or nonexistent SPD. This type of dispute can be extremely costly due to exposure for unanticipated benefits in connection with such claims, and court costs in defending such disputes.


ERISA has been the law of the land since 1974. Although amended several times in the last 40 plus years, it remains the main employee benefit law. Two key requirements for an employer/plan sponsor are the reporting and disclosure requirements. The main disclosure requirement is providing a Summary Plan Description to plan participants describing their rights and obligations. Failure to comply with this ERISA disclosure requirement can result in costly consequences. Thus, prompt production and distribution of SPDs is an often overlooked but crucial aspect of ERISA compliance. Contact your JRG Advisors representative for assistance with an SPD.

Ground Broken on Second Phase of Jacob’s Landing, Presented by Villager Realty

(L-R): Bob Dressler, president, Danville Business Alliance Board of Directors; Fred Gaffney, president, Columbia Montour Chamber; Jim Wilson, executive director, Danville Business Alliance; Tom Forrestal, plant manager, Merck Cherokee; Todd Ross, president, T-Ross Brothers Construction; Sabra Karr, Villager Realty; Tim Karr, president and CEO, Villager Realty; Jay Reed, board member, Danville Business Alliance; Dennis Witmer, foreman, T-Ross Brothers Construction (Photo courtesy of T-Ross Brothers Construction)

On Wednesday, Aug. 9, Columbia Montour Chamber president Fred Gaffney joined a handful of other local business leaders to break ground on Phase Two of Jacob’s Landing, presented exclusively by Villager Realty, an upscale community of luxury townhomes adjacent to the Susquehanna River in Danville. This second phase will add a total of 16 new housing units to the already-existing 12 townhouses in the development. The new units will consist of eight brownstone units and eight riverfront condominiums in a total of three buildings. The contractor for the project is T-Ross Brothers Construction and the architect is ArchCentral Architects

Located on the north shore of the river, Jacob’s Landing enjoys spectacular views of the river from every one of the new condos. Downtown Danville is a five-minute walk and Geisinger Medical Center is just a five-minute drive away.

“The continued development of Jacob’s Landing will help the continual improvement of the character of Danville and provide an additional much-needed housing option for people in the area,” said Gaffney.

“We are very excited about going forward with this project,” said Tim Karr, president and CEO of Villager Realty. “We are just replicating what you already see on this site from Phase One.”

WNEP-TV was also at the groundbreaking event and filed this report

(Information from a T-Ross Brothers Construction press release was used in this story)

(Video courtesy of T-Ross Brothers Construction)

Members Learn About Business Opportunities Surrounding Upcoming Atlantic Sunrise Pipeline

Mike Atchie from Williams gives attendees at Tuesday’s Learn at Lunch an overview of the Atlantic Sunrise pipeline project. He also spoke about the WILLShop Local mobile app, which will encourage workers to patronize local businesses and which local businesses and sign up to be listed on for free.

An engaged group of individuals from Chamber member organizations heard the latest updates on the Atlantic Sunrise pipeline project and also about the many opportunities for business development that will be brought about by the pipeline project once it gets underway later this year. Mike Atchie, director of community outreach for Williams, spoke to the group at the August Learn at Lunch, held on Aug. 8 at Wesley United Methodist Church. He began the presentation by giving the audience a brief summary of how and why the project came about and everything that has happened in the three-plus years to get the necessary approvals and permits. Williams is awaiting a few final permits and then plans to get the project started in the fall, taking a about a year to complete. The purpose of the pipeline is to add additional transmission capacity for gas coming out of the Marcellus Shale region in north central Pennsylvania so that the gas can be more easily exported to other states and areas up and down the east coast through the Transco pipeline. According to statistics released last month by the U.S. Energy Information Administration, PA ranked second in the nation in natural gas production for the fourth straight year in 2016. 

The Atlantic Sunrise pipeline will run through Columbia County on its way to connect with the Transco pipeline in southern Lancaster County. Some workers that will construct the pipeline in Columbia County will be from outside the immediate area and will therefore need to locate goods and services. In order to encourage its contractors to patronize local businesses during their time here, Williams has developed a mobile application called WILLShop Local and all local businesses are encouraged to sign up, free of charge, to be listed on this app. 

The next Learn at Lunch is scheduled for Tuesday, Oct. 10, from 12-1 p.m. (location TBA) and will feature a speakers talking about the ChamberChoice affinity programs that are available as benefits of Chamber membership, specifically the Penn National business insurance program and the OnDemand Energy program. 

Member News – August 9, 2017

Member News

PFCU’s new Bloomsburg branch.

Grand Opening and Ribbon Cutting at PFCU Tomorrow

Philadelphia Federal Credit Union (PFCU) will hold a ribbon cutting ceremony tomorrow, Aug. 10, at 11 a.m. at their new branch office located in the Route 11 Marketplace, 1615 Columbia Blvd. (Rt. 11), Bloomsburg. The ribbon cutting will be followed by a public grand opening featuring free food and giveaways, which will run until 2 p.m. 


Next First Step Seminar in Bloomsburg Aug. 11

Have you ever thought about starting your own business, but weren’t quite sure if it would be right for you? Or maybe you want to know what paperwork you need in order to open your doors? These and several other common questions for small businesses will covered at the next First Step Seminar given by the Wilkes University Small Business Development Center (SBDC) this Friday, Aug. 11, at noon at the Downtown Bloomsburg, Inc. Business Incubator, 151 E. Main St., Bloomsburg. Laura Haden of the SBDC will speak about the different legal structures a business can be, how to write a business plan and create financial projections, and much more. Cost is $15 for the First Step book. Walk-ins are welcome but pre-registration is preferred. Register by calling 570-408-4334, email or online


Bucknell SBDC Hosts Cybersecurity Workshop

Are you as secure as you think? Join Michael Frauenhoffer of MePush as he talks about compliance vs. actual security at StartUpLewisburg, 416 Market St., Lewisburg next Tuesday, Aug. 15 at noon. Hosted by the Bucknell Small Business Development Center, this event will also feature local pizza, networking and tours of StartupLewisburg, Bucknell University’s home for innovators and entrepreneurs in downtown Lewisburg. Register here.


Mandated Child Abuse Reporting Training Session Available

Montour County Children and Youth Services will host a free training for individuals who are mandated by law to report suspected child abuse next Thursday, Aug. 17, from 9 a.m.-12 p.m. The training program is put together by the Pennsylvania Family Support Alliance. Though this training is free, pre-registration is required. For more information or to register, fill out this form on the PFSA website. Those registering will receive an email once their registration has been processed, which will include the address for the training location. 


Wild For Salmon Hosts Annual Fishtival Aug. 19

Help the crew at Wild For Salmon celebrate the return of its fishing team from its record-breaking season in Bristol Bay, Alaska as it hosts its annual Fishtival on Saturday, Aug. 19, from 10 a.m. – 3 p.m. outside its Bloomsburg store at 521 Montour Blvd. (Rt. 11). Owner Steve Kurian and his crew caught over 100,000 pounds of wild salmon during this year’s fishing season, and with harvest numbers so high, they want to share some with the public. There will be free samples of salmon cooked by Chef Josh and the Wild For Salmon crew, and several other visitors will be on hand to free tastings, including beer and wine samples from fellow Chamber members Turkey Hill Brewing and Freas Farm Winery. There will also be an educational booth this year discussing the importance of preserving the lifeblood of the business, Bristol Bay. 

FLSA Overtime Rule Revisited Again

From ChamberChoice

In December 2016, employers faced one of the most dramatic changes in the Fair Labor Standards Act (FLSA) in over 42 years. As a brief background, the FLSA establishes the federal minimum wage for all hours worked (currently $7.25 an hour), and overtime premium pay at one and one-half times an employee’s regular pay rate for worked hours exceeding 40 in one work week. The FLSA also exempts from overtime payments “any employee employed in a bona fide executive, administrative, or professional capacity”, generally referred to as the white collar exemption. Two of the three criteria for an employee to meet the white collar exemption is that the employee must be paid on a salary basis, and the salary must meet a minimum specified salary amount. The latter is known as the salary level test. The salary level test has been set at $455 weekly or $23,660 annualized, for some time.

In 2016, the Department of Labor under the Obama Administration increased the salary level test, more than doubling it, to $47,476 per year. This new salary threshold would have drastically expanded the number of employees eligible for overtime pay. Although scheduled to be effective December 1, 2016, causing a panic attack with employers, it was blocked from enforcement, when a nationwide preliminary injunction was issued by a federal court in Texas (which is in the Fifth Circuit). The preliminary injunction was appealed and is still pending today.

However, what the Trump Administration’s Department of Labor has decided to do is ask the Court not to address the validity of the 2016 rule and salary level test. This will give the DOL an opportunity to revisit the issue through new rulemaking. This request is in line with President Trump’s charge for federal agencies to review regulations with a focus on lowering regulatory burden.

On July 25, the DOL 25 issued a Request for Information (RFI). An RFI is an opportunity for the public to provide data and information that may be used to revise a rule. The RFI seeks comments on a variety of topics under the FLSA, but basically focusing on the salary level test which has been on hold.

Some of the issues for which the RFI seeks comment are:

  • Whether the salary test should be updated based on inflation;
  • Whether there should be a multiple salary level test and whether differences in employer size or locality should matter;
  • What the impact of the 2016 rule was and did employers make changes in anticipation of the rule;
  • Were specific industries/positions impacted more than others;
  • Was the provision permitting 10% of the salary level test to be satisfied with bonuses appropriate; and
  • Should the salary levels be automatically updated?

Of course, the merit of these comments will be dependent on the Fifth Circuit’s decision on whether the salary test is permissible to begin with. A favorable determination will provide the Department with information to proceed on a new rulemaking. Employers should continue to watch this issue until finalized.