What is an SPD and why should you care?

An SPD, or Summary Plan Description, is a completely detailed multi-page document that gives all the important information about Employer Healthcare Plans, so you can make an informed decision when trying to get affordable healthcare. Summary Plan Descriptions are also used for retirement plans. ERISA, or the Employee Retirement Income Security Act, and the Department of Labor, require that plan administrators provide a SPD free of charge.  Plan administrators are the people who run your healthcare or retirement plan.  The SPD tells what you get and how it’s provided to you.  It tells you when you can join, how the benefits are calculated, how to file for a claim, when they are vested, and what you get when the benefits are paid to you, as well as other important information.  If the plan is changed, then it is required for you to be informed with either a new SPD or something called a Summary of Material Modifications. Either one must also be provided to you for free.

So why should you care what a SPD is? If you don’t read it, you may miss the enrollment period and not get your benefits. When it comes time to file a claim, you need the information on how to do this. How will you know when you are vested?  Vesting is the time before you can fully claim certain benefits.  When you make a claim, the SPD not only tells you how to file a claim, but also tells you how long before they are required to approve or deny a claim, and what the appeal process for denied claims is. You also can find out from the SPD if the plan is taking out the payment for the plan pre-tax from your paycheck. This may one of several important considerations when deciding whether to participate in a plan that can get you affordable healthcare. Maybe you want to know if the plan covers pre-existing conditions. Maybe you want to know your deductible for something specific.

Another thing you should get free of charge when you get your SPD is a Summary Annual Report. Every year a financial report is filed with the Department of Labor. This is a summary of that report.  It also should be given to you at no cost.  So why should you care what a SPD is? The reason is because it is a sort of an owner’s manual for your healthcare plan. Those who are experts in the industry suggest that you seek a minimum of three free online quotes.