Wrap Document

A WRAP document essentially eliminates the need and cost of preparing multiple Form 5500 filings

by bundling health and welfare plans into a single plan. Companies both large and small can benefit

from the use of a WRAP document.

Small to Medium Sized Companies

The Employee Retirement Income Security Act (ERISA) requires plan administrators to give employees information about plan rules, financial information, and documents on the operation and management of the plan. Most small to mid-sized organizations lack the time and money to keep up-to-date on the ever-changing rules and regulations. An easy and affordable solution to this problem is a WRAP document. Plan administrators can use the document to comply with ERISA regulations by wrapping the required language around their carrier's certificate of coverage. Insurance carriers typically only include state-mandated language and ERISA takes care of federal language requirements.

Large Companies

Companies with 100 or more participants on the first day of the plan year are required to file Form 5500. The WRAP document can be used to bundle welfare benefit plans into a single plan document with one plan number, which eliminates the need to prepare multiple Form 5500. Many companies try to file all of their welfare benefit plans on one Form 5500 filing without a WRAP Document, which is not the correct method. This actually opens up the company to DOL and IRS penalties on each separate benefit offered. DOL and IRS penalties can be as much as $1,100 per plan and for each day the company fails to product the correct Form 5500 filings. Penalty maximums typically are $30,000 per year per plan.