Plan Documents
Premium Only Plan
WRAP
As permited under IRS Section 125, the POP plan provides for tax savings advantages for both the employer and employee. By allowing employees to make their premium payroll deductions on a pre-tax basis, employees will take home more spendable income and the employer will reduce their payroll taxes.
- Employee pretax contributions are not subject to federal, state, or social security taxes.
- Employers save on the employer portion of FICA, FUTA, and workers' compensation insurance premiums.
ERISA requires private sector employers, regardless of size, to automatically distribute a summary plan description (SPD) to all plan participants free of charge. Insurance companies provide a booklet or certificate that explains the benefits; however, most booklets and certificates do not comply with the ERISA requirements applicable to SPDs. The easiest way for employers to comply with ERISA is to adopt a Wrap Document. The Wrap Document "wraps" around the insurance policy, certificate and booklet supplementing that information so that the combined documents comply with ERISA.
Who needs an ERISA Wrap Document?
Employers who offer insured or self-funded group benefits. This includes all types of group health plans such as major medical, dental, vision, group term life and disability benefits to name a few.