ERISA Compliance for California Employer Health Plans
The Employee Retirement Income Security Act (ERISA) governs most employer-sponsored group health plans in California and across the US. ERISA compliance is an ongoing obligation — not a one-time setup task. Failure to comply can result in IRS penalties, DOL investigations, and personal liability for plan sponsors (the employer). This guide covers the key ERISA requirements for California employers.
Plan Documents
Every ERISA-covered group health plan must have a written plan document that describes plan terms, eligibility, benefits, claims procedures, and fiduciary responsibilities. Most employers use a combination of the insurance certificate/booklet (from the carrier) plus a wrap plan document that covers ERISA requirements not in the carrier document. The wrap document is critical — without it, your plan document is incomplete and your plan is non-compliant. Many brokers provide wrap documents as part of their service.
Summary Plan Description (SPD)
The SPD is a plain-language summary of the plan that must be distributed to all covered participants: within 90 days of initial coverage, within 90 days of a plan change, every 5 years (if changes have been made), or every 10 years (if no changes). The SPD must include the plan's name, sponsor information, eligibility rules, benefits description, claims and appeals procedures, and participants' rights under ERISA. Carriers provide summary documents (SBCs) but these are not full SPDs — a complete ERISA-compliant SPD requires the wrap document to fill gaps.
Form 5500
Employers with 100+ plan participants at the beginning of the plan year must file Form 5500 (Annual Return/Report of Employee Benefit Plan) with the DOL. Small plans (under 100 participants) may qualify for the simplified Form 5500-SF or an annual reporting exemption. The filing deadline is 7 months after the plan year end — for a calendar-year plan, that's July 31. Form 5500 is a public document, and the DOL has been actively auditing late or non-filers.