ERISAfire strives not only to keep its plan documents up-to-date for regulatory, legislative and judicial updates, we also look to continuously improve plan language to make it an effective fiduciary risk management tool. Here are some recent updates.

An increasing number of states, like Colorado, are mandating that insurance policies issued in those states provide for a longer period of coverage to dependents. While existing Wrap+℠ plan language incorporates the terms of these insurance policies, it would be clearer if the ERISA plan document (aka "wrap document") provided more specific language about the possibility of extended dependent coverage.

Section 3.3 of both the Wrap+POP and Wrap+FSA core documents are updated to give the plan sponsor the discretion, consistent with the underlying insurance policies, to extend participation of dependents through the end of the year in which the event causing termination of eligibility occurs (such as reaching age 26).

Plan documents generated on or after March 24, 2025, already have this updated language. Employers with a previously prepared plan document wanting to take advantage of this update can amend their current document with the adoption of an SMM.

While the language update generally applies to any state insurance mandate for extended dependent coverage, the SMM is recommended specifically for Colorado employers with insured medical coverage that have between 2 and 100 employees.

Regarding distribution of the SMM to employees, employers do not necessarily need to go to any special effort. If the employer normally distributes notices electronically during open enrollment by pointing employees to a benefits microsite or shared drive where plan documents and notices are stored, then store the SMM there, and the usual open enrollment process of pointing employees to that location will constitute distribution of the SMM. If the employer does not have an electronic distribution process for benefits notices, the SMM can simply be included with the usual annual benefits notices packet. For more information about electronic distribution of plan documents and notices, read this ERISAfire help article.

The technical deadline for distributing the SMM to plan participants for calendar year plans is June 29, 2026. (For fiscal year plans, it's 210 days after the end of the current plan year.) However, in the absence of a specific request from a plan participant under ERISA Section 104(b)(4), there aren’t any penalties under ERISA for failing to distribute a SMM or for distributing it late.

The Wrap+℠ mid-year election change language incorporates all of the possibilities permitted under Code Section 125, but certain mid-year election changes weren't specifically called out. In particular, the mid-year election change permitted when changes are made under another employer's plan was left to a simple regulation cross-reference.

For improved communication of the different possibilities, the fourth bullet point in Section 4.6.2 is updated to state, "including changes made under another employer’s plan...."

Plan documents generated after April 29, 2025, will have this updated language. As a minor clarification only, it is not recommended that employers adopt a SMM or restate the plan document solely on account of this change. Instead, capture the change during the plan's next regular restatement.

If it has been a while since the plan document was last worked on, a restatement may be in order. ERISA generally requires a restatement at least every 5 years, but more frequent restatement is recommended to ensure the plan document stays current with benefit changes and updates ERISAfire makes for regulatory, legislative and judicial updates.

A self-service restatement is available by updating the interview and regenerating the document through Wrap+. Or, if it is preferred that our team of professionals handle it, engage ERISAfire for a restatement through a Tier 1 service (employers 2-500) or Tier 2 service (500+).