I’m not sure I can articulate just how fundamental the summary plan description (SPD) is to self-funded plans. Not to be confused with the written plan document, this is the comprehensive piece created for plan participants that spells out who and what your plan covers … the first source many turn to when coverage questions arise. So if it’s such a critical document, why do so many companies fail to get theirs right and put themselves at risk for litigation and liability?

These are a few of the most common mistakes – all easily avoidable – that are made with SPDs:

• Missing core elements – The fact that you simply put together an SPD isn’t enough to satisfy ERISA requirements, as you also need to be sure you have all the right stuff in it. Just one missing component like eligibility criteria or claims process info can make your SPD incomplete.
• Not using clear, easy-to-understand language – An SPD is meant to communicate the details of your health plan in clear, simple language that participants can easily understand. Loading your document with complex legal terms won’t cut it here.
• Failing to do a thorough review – As with all important documents, SPDs should be thoroughly reviewed by multiple parties. Your TPA and employer/plan sponsor teams should do a careful assessment, and your legal partner can also weigh in with valuable perspective.
• Update and distribution issues – When aspects of your self-funded plan change, your SPD needs to reflect that. Be sure you keep it updated and are following the appropriate guidelines for getting the latest versions in front of plan participants.

SPDs are a big deal in self-funding and should never be treated as an afterthought. Avoid some common mistakes with yours by making sure you have all the required plan info in clear language, completing a careful review and updating/distributing as needed.