Why Consider a Wrap Plan related to your Employee Benefits?

A Wrap Plan is a single welfare benefit plan that combines employee health and welfare benefit plans into one plan. A Wrap Plan can save employers time, filing costs, and ease compliance with reporting and disclosure rules.

The Employee Retirement Income Security Act (ERISA) provides an employer with the option to offer different types of welfare benefit to its employees:

  • Medical, surgical, or hospital care or benefits, or
  • Benefits in the event of sickness, accident, disability, death or unemployment, or
  • Vacation benefits, or
  • Apprenticeship or other training programs, or
  • Day care centers, or
  • Scholarship funds, or
  • Prepaid legal services

ERISA requires welfare benefit plan to be codified in a written plan document, to include the following content:

  • Benefits and eligibility, and
  • Funding of benefits, and
  • Procedures for allocating and delegating plan responsibilities, and
  • Plan amendment and termination procedures, and
  • Designation of named fiduciary, and
  • Required provisions for group health plans, such as HIPPA compliance.

Employers must also provide employees with a Summary Plan Description (SPD) alerting them about their eligibility to participate in the plan.  Many employee welfare benefit plans are provided through insurance, and the companies providing coverage will have documents relating to the plans.  However, those documents are typically drafted to comply only with applicable insurance laws without being ERISA-compliant.

A Wrap Plan bundles the ERISA health and welfare benefits and includes all required disclosures. Rather than amending multiple documents after a new law is passed that affects a plan, an employer can make a single change to the Wrap Plan. Additionally, if an employer has plans that have 100 or more participants or are otherwise subject to the filing requirements to file Form 5500, a Wrap Plan also makes this administrative filing easier too. Rather than filing a separate Form 5500 for each health and welfare pan, a Wrap Plan allows the employer to file a single Form 5500 for all benefits covered by the Wrap Plan.

A Wrap Plan is an effective ERISA compliance strategy that allows employers to reduce the amount of time and cost involved in administering various health and welfare benefit plans.

© 2019 Vandenack Weaver LLC

For more information, Contact Us

New Minimum Wage Law in Iowa

Iowa enacted a new law, Iowa House File 295, that prohibits counties and cities from regulating certain employment matters that are regulated by the state. On a practical level, for employers, this will reduce some compliance burdens, including eliminating different minimum wage rates across the state. The law, which took effect on March 30, 2017, preempts city and county rules pertaining to minimum wage, employment leave, hiring practices, employee benefits, and similar matters that pertain to terms of employment. For example, Johnson County, Iowa, had a minimum wage of $10.10 an hour, but that has preempted with the new state law, which means the minimum wage in Johnson County is now $7.25 an hour. Now, regardless of the action taken by county or city government, including actions taken prior to the new Iowa law, the state law will preempt and govern practices by employers.

© 2017 Vandenack Weaver LLC
For more information, Contact Us

What Are the Benefits to Offering Group Health Insurance?

An Employee Benefits FAQ with Joshua A. Diveley.

One of the big benefits to offering group health insurance is tax benefits. For example in 2014, there is a small business tax credit that allows small businesses that pay a portion of their employees’ health care premiums to take up to a 50% credit. In addition, the premiums can be paid on a pre-tax basis rather than after tax, which is helpful for employees because if you pay after tax the only tax benefit you can get is by taking an itemized deduction on your personal return and that is subject to a 10% floor so a lot of people don’t hit that because of their income levels so the pre-tax premium payments can be a significant benefit.

Another benefit is that employees may be able to get a preferred group rate as compared to everyone going out and buying individual policies and having their personal demographics determine their rate.

And lastly, with health care costs going up significantly each year, the health care insurance and benefits you provide can be a significant recruitment and retention tool for your employees.

© 2014 Parsonage Vandenack Williams LLC

For more information, Contact Us

What Kind of Benefits Are Available to Offer to My Employees

An Employee Benefits FAQ with Joshua A. Diveley.

The most common benefits are retirement benefits of some sort and also health benefits. Under each of those you can have variations, for example, under the health there are group medical insurance plans, prescription drug coverage, dental, vision, long term disability and short term disability. There are a lot of options to have under the medical.

In addition, you can have paid time, adoption reimbursement and education reimbursement. There are a lot of options available for employee benefits.

© 2014 Parsonage Vandenack Williams LLC

For more information, Contact Us