 Summary Plan Description
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Special Distribution Requirements for SPDs with Medical, Dental, or Vision Benefits |
| This Section addresses requirements for plans that offer medical, dental, or vision benefits. |
Hows does the SPD serve as COBRA Notice? |
| Appendix C takes the place of the initial COBRA notice that was previously provided to participants and spouses.
Do not use the old initial COBRA notice on or after January 1, 2005.
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| How should the SPD be distributed if medical, dental or vision benefits are offered? |
These rules are more restricitive for medical, dental, and vision benefits since the normal SPD distribution rules (discussed in the
Distribution Requirements section as well as the COBRA notice rules apply
- The SPD and transmittal memo should be distributed to all eligible employees/participants and their spouses. Generally this also includes any COBRA qualified beneficiaries,
qualified recipient under a Qualified Medical Child Support Order, or spouse/dependents of deceased participants who may be receiving benefits. If the SPD is revised or amended, a
follow up distribution should be done.
- Future Distribution Deadline: The memo and SPD should be used throughout the year for eligible new hires and their spouses. As a general rule, the SPD with Appendix C should be used throughout the year
for eligible new hires and their spouses. As a general rule, the SPD with Appendix C should be delivered within 90 days after coverage begins. Of course, usually Banks will want to give
an individual the SPD prior to commencement of benefits. If a spouse's coverage commences after the date on which the intial notice is required to be provided to the employee, then
a seperate notice will be needed.
A sample Participant Transmittal Memo is included in this manual. The memo should be modified to reflect
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| How is the memo prepared for distribution? |
Banks should customize the memo as follows:
- List the name of the participant.
- Also list the spouse of the participant, if applicable. Banks usually should be able to send one memo (listing both names) and one SPD to a common address. However, if the
spouse lives at a separate address, a separate memo and SPD must be provided to the spouse.
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| What ar the options for delivery? |
It is important to be able to prove that the SPD was sent to the participant and spouse. Keep records that indicate the date of distribution, a list of names of individuals to whom
it was distributed, and a copy of what was sent (remember that the materials may be modified from time to time).
- By First Class Mail: This is a generally recommended approach. If a Bank send the SPD to a participant and spouse by first class mail, list both partiies by name (e.g., Sarah Smith and John Smith) on the envelope.
Commentators suggest that mailing with a post office certificate of mailing provides good evidence, but they note that larger plans usually operate by using first class mail with business records that document mailing.
- By Hand Delivery: It can be more difficult to prove that the SPD was delivered by hand delivery than by first class mail. For that reason, most commentators recommend first class mail.
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