How to draft your first summary plan description (SPD)

Written by: Gabrielle Smith
Published on May 7, 2021.

If you’re setting up a health reimbursement arrangement (HRA) for your organization, drafting a series of plan documents is one of the first requirements the Employee Retirement Income Security Act (ERISA) has for you to follow. One of these documents is the summary plan description (SPD).

In this article, we’ll cover what an SPD is, what it should include, when to distribute it, and how PeopleKeep’s software solution can make setting up your plan documents hassle-free.

What is a summary plan description (SPD)?

An SPD is exactly what it sounds like—a summary of your plan that outlines the details and requirements of the benefit you’re offering. It’s the main vehicle for communicating health plan rights and obligations to the plan participants.

Unlike your other legal plan documents, SPDs are only intended to be read by your employees, so it should be written in plain language that’s easy to understand. For this reason, it’s a good idea to have it available in multiple languages if more than 10% of your employees have a different first language other than English.

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

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

What should a summary plan description include?

ERISA § 2520.102-3 outlines the required contents of your SPD. In general, it should inform participants of their benefits, rights, and obligations under the plan.

The SPD provides information on:

  • When an employee can begin to participate in the plan
  • How service and benefits are calculated
  • Who can make contributions to the plan
  • When benefits becomes vested
  • When and in what form benefits are paid
  • How to file a claim for benefits

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 of your eligible employees so they can read it and understand the benefit.

For first-time HRAs, the SPD needs to be delivered within 120 days after the plan is established. 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.

All you need to do is 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 that details the changes.

However you go about it, you’re required to 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.

How can I get help with my plan documents?

Believe it or not, drafting an SPD can take employers months to completely finish—especially for small employers that don’t have a full HR team to help with these kinds of responsibilities.

That’s why we recommend using a software administration tool like PeopleKeep. We handle all of the most time-consuming tasks, like preparing and updating legal documents, reviewing reimbursements, and even sending you a weekly email report with any reimbursements you 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 HRA, or reimbursing your employees, we’re here to help.

When administering an HRA with PeopleKeep, offering health benefits is hassle-free—most customers only need about five minutes per month to administer their benefit.

Watch our product demos to see how PeopleKeep can work for your organization


Setting up your first HRA 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. With the guidelines in this article, you’ll be ready to take on your summary plan description so your employees can fully appreciate and utilize your health benefit plan to its fullest.

This article was originally published on January 24, 2014. It was last updated on May 7, 2021.

Originally published on May 7, 2021. Last updated May 7, 2021.


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