How to draft your first summary plan description (SPD)

Written by: Chase Charaba
Published on August 4, 2022.

If you're setting up a health reimbursement arrangement (HRA) or other employee benefits for your organization, drafting a series of plan documents is one of the first requirements laid out by the Employee Retirement Income Security Act (ERISA) for plan administrators. One of these required documents is the summary plan description (SPD).

This article will cover what an SPD is, what it should include, when to distribute it, and a hassle-free way to create your plan documents.

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What is a summary plan description (SPD)?

An SPD is a summary of your benefit plan that outlines the benefits' details and requirements. It's the primary vehicle for communicating health plan rights and obligations to the plan participants.

Unlike your other legal plan documents, an SPD is only intended to be read by your employees, so you should write it in plain language that's easy to understand.

For this reason, it's also a good idea to have it available in multiple languages if some of your employees speak a first language other than English. If more than 10% of your employees don't speak English, legally you must provide the SPD in other languages.

Which health plans require a summary plan description?

The following plans require an SPD:

SPDs are an essential requirement for all employer-sponsored health benefit plans, including qualified small employer HRAs (QSEHRAs), individual coverage HRAs (ICHRAs), and group coverage HRAs (GCHRAs), also known as integrated HRAs.

If an HRA exists without a written SPD, it's considered out of compliance. You may be fined up to $110 per day if you don't provide one within 30 days after an individual's request.

However, there are less formal health benefits such as taxable health stipends that don’t require these kinds of legal documents. A health stipend isn’t a substitute for an HRA or insurance for applicable large employers (ALEs), but it can be a highly flexible alternative for small businesses.

What should a summary plan description include?

ERISA § 2520.102-31 outlines the required contents of your SPD. It should generally inform participants of the plan's benefits, rights, and obligations.

The SPD provides information on:

  • Description of benefits
  • When an employee can begin to participate in the plan
  • How you calculate the services and benefits
  • Who can make contributions to the plan
  • When benefits become vested
  • When and in what form benefits are paid
  • How to file a claim for benefits
  • What features are included in the benefits
  • Rights for plan participants

An SPD also helps protect employers from legal action, so an attorney should always review it.

What do I do with a summary plan description after it’s finished?

Once your SPD is written, you're required to distribute it to all eligible employees so they can read it and understand the benefit.

For first-time HRAs, you must deliver the SPD within 120 days of establishing the plan. For newly eligible participants in an existing HRA, you need to deliver the SPD within 90 days of their first date of coverage under the plan.

What if I want to change the benefit after I’ve sent the SPD?

If you realize after you've distributed your SPD that you need to make a change, don't panic! There's a simple procedure in place if you need to update your SPD during the plan year.

The plan administrator must inform your eligible employees of the changes either by sending out a revised SPD or by writing and distributing a separate document called a summary of material modifications (SMM) that details the changes.

However you go about it, you must provide the new information about any significant changes within 60 days. A change is considered “significant” if it reduces your employees' coverage or benefits. If the changes don't affect your employees' coverage, the notification can be distributed within 210 days after the end of the plan year when the change became effective.

What is the difference between a summary plan description and a plan document?

The SPD is a summary of the plan document you must provide to your employees free of charge. It details the plan benefits and features in a way that's easy to understand.

A plan document explains what benefits participants are entitled to and is used by the plan administrator to make decisions around plan operations. This is often more detailed and isn't required to be distributed to employees.

Does traditional group health insurance provide a plan document or SPD?

Your insurance company typically doesn't provide the ERISA-compliant plan document or SPD. This is the responsibility of the plan administrator. However, insurance companies do often provide other information and comments that can help you create an SPD.

Is a summary plan description the same as a summary of benefits and coverage?

An SPD and a summary of benefits and coverage (SBC) aren't the same.

While there can be many other administrative responsibilities depending on the employee benefit plan offered, the SBC is required for many health insurance coverage plans. The Affordable Care Act (ACA) generally requires plans to provide an SBC that describes the benefits and coverage under your plan. Plan sponsors must provide an SBC to participants upon request, at renewal, and during special enrollment to help them select health benefits plans.

Meanwhile, an SPD is required by ERISA for health benefits, retirement benefits, and other types of plans. It details the benefits and plan features for the plan offered to your employees.

How can I get help with my plan documents?

Drafting an SPD can take employers months to finish—especially for small to midsize employers that don't have an entire HR team to help with these kinds of responsibilities.

Using benefits administration software like PeopleKeep can help ensure compliance with the law when offering HRAs. We handle the most time-consuming tasks, like preparing and updating legal documents, reviewing reimbursements, and sending the plan administrator a weekly email report with any reimbursements they need to approve.

What's more, you and your employees will have access to our award-winning customer support team every step of the way. So whether you have questions about legal plan documents, administering your benefits, or reimbursing your employees, we're here to help.


Setting up your first ERISA-compliant benefit and drafting all of the required plan documents can seem intimidating, but with the right tools and support by your side, it can be a breeze. By following the guidelines in this article, you'll be ready to take on your SPD so your employees can fully appreciate and utilize your benefit plan to its fullest.

If you're ready to offer an HRA or employee stipends to your workforce, PeopleKeep can help! Our personalized benefits administration software makes it easy to set up and manage your benefits in just minutes each month.

Schedule a call with a personalized benefits advisor today to discuss how personalized benefits can work with your organization

This blog article was originally published on January 24, 2014. It was last updated on August 4, 2022.


Originally published on August 4, 2022. Last updated August 4, 2022.


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