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What is a Summary Plan Description under ACA?

What is a Summary Plan Description Under the Affordable Care Act?

I recently had the “privilege” of reading a Department of Labor (DOL) employee benefit audit letter addressed to a business with under 50 employees.

The first item listed for submission to the auditor was the Summary Plan Description (SPD). What is an SPD?

It is a federally required document that explains to employees their plan benefits, claim review procedures and other rights, such as COBRA and the Health Insurance Portability and Accountability Act, or HIPAA. It will even contain the employer’s tax ID number, types of plans offered (if more than one) along with the respective names and addresses of the different insurance companies. It is important that employers realize that an SPD is not a Summary of Benefits and Coverage (SBC) or a Certificate of Coverage, both of which are only issued by an insurance company.

The SPD is solely the employer’s responsibility, although past enforcement was lacking. That being said, on May 9, 2013, the DOL issued a model notice for employers to give to all of their employees/dependents a notification of the Insurance Exchange (Marketplace) opening on October 1, 2013. This notice requires the employer to provide some information about the current health plan, if any, and will inform the employee about having access to the Insurance Marketplace.

On the form, there is a self-directed question for employees asking, “How can I get more information?” The posted answer is: “For more information about your coverage offered by your employer, please check your Summary Plan Description.” Under the Affordable Care Act, the Employee Benefits Security Administration (EBSA), which is under the DOL, has already begun auditing employers in 2013.

The listing of items required, including the SPD, can run several pages long, and an audit can take from six to eighteen months in some cases. If the employer does not have an SPD, they are given 30 days from the DOL’s request to get one. The civil penalty is up to $110 per day. The bottom line, for businesses of all sizes, is to investigate resources that will provide your SPD document.

About Henry GrosJean

Henry GrosJean
Henry GrosJean has been an independent broker since 1979 and has published numerous articles for local media. He can be reached at

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