FAQs - Insurance Terminology

Certificate of Coverage (Certificate of Insurance, "Cert," or Certificate Booklet)—booklets describing the terms of the insurance coverage that are provided to Participants are Certificates of Insurance; they are not Summary Plan Descriptions (SPDs) because they usually do not contain all of the requisite ERISA provisions and leave out key information. This is a very important, yet highly misunderstood, distinction. Note: Certificates of Insurance/Coverage are often incorrectly referred to as SPDs—even by experienced benefits professionals.

Insurance Companies which provide benefits to Welfare Benefit Plans are generally not responsible for an ERISA Welfare Benefit Plan's compliance—that is the obligation of the Plan Sponsor/Administrator/employer.

Master Application—an application for group insurance, usually completed by the producer and signed by the producer and employer. It generally contains employer information, benefits requested, eligibility and effective date provisions, employer contribution, participation requirements, etc. The Master Application is often attached to and made part of the Master Contract because it contains the representations upon which the contract of group insurance was issued to the employer.

Master Contract—an insurance policy or contract issued to an employer, which provides group insurance benefits to its employees. It usually contains the same information as the Certificate of Coverage, but also has information specifically relating to the employer, such as a grace period for payment of premiums, the Policy Year, and premium rates.

Multiple Employer Trust (MET)—a legal trust generally established by an insurance company for pooling a number of small, unrelated employers. It may provide group insurance coverage on an insured or self-funded basis.

Policy Year/Anniversary—the twelve month period for which coverage is provided and premiums are established. This is not necessarily the same as the ERISA Plan Year. The Policy Anniversary is the date that the insurance policy/contract renews and premium rates are re-determined.

Summary of Benefits (Benefit Summary)—usually a one, two, or three page handout summarizing and highlighting the features of coverage contained in the Certificate of Coverage, e.g., deductibles, copays, coinsurance, exclusions, etc.

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© 2017 ERISAPros, LLC, All rights reserved. Information on ERISAPros' website, its newsletter, “News & Views,” and its blog, “ERISA Wonk,” is published as a general informational source. Information and articles are general in nature and are not intended to constitute legal or tax advice in any particular matter. Blog posts and comments reflect the personal views of their respective authors - not those of ERISAPros. Transmission of this information does not create an attorney-client relationship. ERISAPros, LLC is not a law firm and is not giving legal or tax advice. It does not warrant and is not responsible for errors or omissions in the content on its website or in its newsletters. ERISA is a complicated and confusing law. Summary Plan Descriptions (SPDs), Wrap Plan Documents, and Form 5500s require review and updating by qualified ERISA compliance professionals.