What Should I Enter as the Wrap Plan Year if Different Lines of Coverage Have Different Plan Years?

The main objective of a Wrap SPD and Plan Document is to wrap all benefit component plans together into a single Welfare Benefit Plan. Therefore, the Wrap Plan Year refers to the Wrap Welfare Benefit Plan, which incorporates all other welfare plans (along with insurance contracts and other relevant documents) into a single plan. It does not refer to the plan year for individual lines of coverage. (The renewal dates for each line of coverage will be spelled out in the benefit component documents that must be distributed to plan participants to comply with ERISA.)

If this is an amended and restated plan (which would be the case, for example, if a plan sponsor is merging all individual coverages such as dental and life into the group health plan), you would generally continue to use the group health plan's existing Plan Year (which could have already been established through a prior document or practice, or in a previously filed Form 5500). The effective date could either be the date the group health plan was first offered, or the date on which any specific plan provisions became effective.

If this is a new plan (please note that, because wrap documents can be created for existing plans, the plan is not new simply by virtue of the creation of Wrap documents—rather, this would be chosen, for example, if the plan sponsor has never had any welfare benefit plan, or wants to have a "clean break" from past practices), the plan sponsor can choose any twelve month period for the Plan Year. The Plan Year does not have to match any insurance contract year or the open enrollment period or the employer’s fiscal year. Generally, however, most employers select a January 1 calendar year as their Plan Year, which matches the effective date of their open enrollment selections. If a Plan Year does match an insurance contract year and the insurance contract year changes, there is no need to change the Plan Year. The effective date would be the date the wrap documents are created.

Please refer to our New or Amended Plan FAQs and our Plan Year – Effective Dates FAQs for more information and consult with benefits counsel for individualized guidance.