ERISA Compliance Checklist for Employers

If you sponsor a health plan, retirement plan, or other employee benefit for your team, the Employee Retirement Income Security Act (ERISA) applies to you. Violations can trigger Department of Labor audits, penalties of up to $250 per day for late filings, and personal liability for plan fiduciaries. The good news? Most compliance gaps are preventable with the right systems in place.

Schedule a free consultation with WHIA to find out exactly where your benefits compliance stands today.

This ERISA compliance checklist walks you through every requirement that matters for Washington State employers with group health plans, from Summary Plan Descriptions to Form 5500 filing. Keep it bookmarked, share it with your HR team, and use it as a baseline for your annual compliance review.

What Is ERISA and Which Employers Does It Cover?

ERISA is a federal law enacted in 1974 that sets minimum standards for employee benefit plans offered by private-sector employers. It covers group health insurance, dental and vision plans, life insurance, disability coverage, retirement plans like 401(k)s, and flexible spending accounts (FSAs).

ERISA applies to nearly every private employer that offers a benefit plan to employees, regardless of company size. If you have even one employee enrolled in a group health plan, ERISA likely applies.

There are a few exceptions. Government employers, church plans, and plans maintained solely to comply with workers’ compensation or unemployment laws fall outside ERISA. But for most Washington businesses with 20 to 300 employees, ERISA coverage is a given.

One important detail: ERISA preempts state insurance regulations for self-funded health plans. That means if your company self-funds its health benefits, federal ERISA rules take priority over Washington State insurance law. This distinction affects everything from plan design to claims appeals.

Your Complete ERISA Compliance Checklist

Below is a practical, section-by-section breakdown of what ERISA requires. Use this as a working checklist for your annual benefits review.

1. Summary Plan Descriptions (SPDs)

Every ERISA-covered plan must have a Summary Plan Description. The SPD is the primary document that tells employees what the plan provides, how it operates, and what their rights are. According to the Department of Labor, SPDs must be written in plain language that participants can understand.

Your SPD must include:

Plan name, employer identification number (EIN), and plan number
Type of plan (health, dental, retirement, etc.)
Name and address of the plan administrator
Eligibility requirements and enrollment procedures
Description of benefits and any cost-sharing (deductibles, copays, coinsurance)
Claims filing procedures and appeal rights
Plan amendment and termination provisions
COBRA continuation coverage rights
Statement of ERISA rights

New employees must receive their SPD within 90 days of becoming plan participants. When you make significant changes to a plan, you must distribute a Summary of Material Modifications (SMM) within 210 days after the plan year ends.

2. Wrap Plan Documents

Here is where many employers fall short. Your insurance carrier’s certificate of coverage is not an ERISA plan document. It does not contain all the language ERISA requires, such as the named fiduciary, plan administrator details, and claims appeal procedures.

A wrap plan document “wraps” around each carrier contract (medical, dental, vision, life, disability) and adds the ERISA-required language. Without a wrap document, each individual benefit technically operates as a separate, non-compliant ERISA plan.

If your company offers multiple benefits but has no wrap document, this should be your first action item.

Talk to a WHIA benefits advisor about getting your wrap plan documents in order. Our compliance attorney subscription covers document preparation and review.

3. Form 5500 Filing

Most ERISA-covered plans with 100 or more participants must file Form 5500 annually with the Department of Labor. The filing is due by the last day of the seventh month after the plan year ends (July 31 for calendar-year plans). You can request a one-time extension using Form 5558, which gives you an additional 2.5 months.

Small plans (fewer than 100 participants) that are fully insured or unfunded may qualify for a filing exemption. However, this exemption does not apply to all plan types. According to the DOL, late or incomplete Form 5500 filings can result in penalties of $250 per day, up to $150,000 per filing.

Key items to verify for your Form 5500:

Accurate participant count as of the first day of the plan year
Correct plan financial information
Independent auditor’s report (required for large plans with 100+ participants)
Schedule A (insurance information) and Schedule C (service provider compensation), if applicable
Electronic filing through the DOL’s EFAST2 system

4. Fiduciary Responsibilities

ERISA designates anyone who exercises discretionary authority or control over plan management or plan assets as a fiduciary. That includes the business owner, HR director, benefits committee members, and any third-party administrators (TPAs) with decision-making authority.

Fiduciary duties under ERISA include:

Duty of loyalty: Act solely in the interest of plan participants and beneficiaries
Duty of prudence: Make decisions with the care, skill, and diligence of a knowledgeable benefits professional
Diversification: For retirement plans, diversify investments to minimize large losses
Plan compliance: Follow the terms of the plan documents, unless they conflict with ERISA

Fiduciary breaches carry personal liability. That means a plan fiduciary can be required to restore losses to the plan out of their own pocket. This is one reason why periodic fiduciary training and documented decision-making processes are so important.

When evaluating vendors, carriers, and plan funding structures, document your selection process. Showing that you compared options and made informed decisions is key to demonstrating prudence.

How Does COBRA Fit Into ERISA Compliance?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is technically an amendment to ERISA, so COBRA compliance is part of your ERISA obligations. Employers with 20 or more employees on more than 50% of typical business days in the prior calendar year must offer COBRA continuation coverage.

Your COBRA compliance duties include:

Providing an initial COBRA notice to new plan participants and their spouses within 90 days of coverage starting
Sending a COBRA election notice within 44 days of a qualifying event (termination, reduction in hours, divorce, etc.)
Offering 18 months of continuation coverage for most qualifying events (36 months for certain events like divorce or dependent aging out)
Allowing a 60-day election period and 45-day initial premium payment window
Not charging more than 102% of the full plan premium (employer + employee share, plus a 2% administrative fee)

COBRA notice failures can result in penalties of $110 per day per affected individual. For a detailed walkthrough of COBRA obligations specific to Washington employers, see our COBRA employer guide for Washington State.

What Claims Procedures Does ERISA Require?

ERISA sets strict timelines for processing benefit claims and appeals. Your plan must have a written claims procedure that participants can access, and the procedure must meet specific requirements.

For group health plan claims:

Urgent care claims: Decision within 72 hours
Pre-service claims: Decision within 15 days (one 15-day extension allowed)
Post-service claims: Decision within 30 days (one 15-day extension allowed)
Appeals: At least one level of internal appeal, with a decision within 30 days for pre-service and 60 days for post-service

After exhausting internal appeals, participants have the right to file a lawsuit or request an external review. Plans subject to the ACA must also comply with external review requirements. If your company must also file ACA reports, keep in mind that these reporting obligations run parallel to your ERISA duties.

A common mistake: relying entirely on your insurance carrier to handle claims and appeals without verifying that the carrier’s process meets ERISA timelines. As the plan sponsor, you are responsible for ensuring compliance, even when you delegate administration.

Record-Keeping Requirements Under ERISA

ERISA requires plan administrators to maintain records sufficient to determine the benefits due to each participant. There is no single record-keeping format required, but the DOL expects you to retain the following documents:

Plan documents and all amendments
SPDs and SMMs
Form 5500 filings and supporting schedules
Trust agreements (if applicable)
Insurance contracts and carrier certificates
Board resolutions related to plan adoption or amendment
COBRA notices and proof of delivery
Claims and appeals records
Enrollment and eligibility records
Fiduciary meeting minutes and decision documentation

Best practice: retain all plan records for at least six years after the filing date of the Form 5500 for that plan year. Some attorneys recommend seven years as an extra buffer. Store records electronically with access controls and backup procedures in place.

Penalties for ERISA Non-Compliance

ERISA violations carry real financial consequences. Here is a quick reference for the most common penalty triggers:

Violation	Penalty
Failure to provide SPD on request	Up to $110 per day per participant
Late or missing Form 5500	$250 per day, up to $150,000
COBRA notice failures	$110 per day per affected individual, plus excise tax of $100/day under IRC Section 4980B
Fiduciary breach	Personal liability to restore plan losses; possible removal as fiduciary
Failure to file SAR (Summary Annual Report)	$250 per day, up to $150,000

The DOL has increased enforcement activity in recent years. In fiscal year 2024, the Employee Benefits Security Administration (EBSA) recovered over $1.4 billion in direct participant benefits through enforcement actions. Smaller employers are not exempt from audits, and the DOL frequently targets companies that have filed late or incomplete Form 5500s.

Annual ERISA Compliance Calendar for Employers

Staying compliant is easier when you build ERISA tasks into your annual benefits calendar. Here is a sample timeline for calendar-year plans:

Month	Action Item
January	Confirm participant count for Form 5500; review plan documents for needed updates
February – March	Distribute updated SPDs or SMMs if plan changes took effect January 1
April	Begin Form 5500 preparation; gather financial data and service provider disclosures
July 31	Form 5500 filing deadline (or file Form 5558 for extension)
September	Distribute Summary Annual Report (SAR) within 9 months of plan year end
October – November	Open enrollment; review fiduciary responsibilities; compare employer health insurance plan options
December	Complete annual fiduciary review; document vendor evaluation and plan decisions

If your plan year does not follow the calendar year, shift these deadlines accordingly. The key is building these tasks into your HR workflow so nothing falls through the cracks.

Contact WHIA for a free benefits consultation and let us help you build an ERISA compliance calendar tailored to your plan year.

How Washington Employers Can Simplify ERISA Compliance

For most mid-market employers, the challenge is not understanding what ERISA requires. It is having the time, expertise, and systems to stay on top of every requirement, every year.

Here is what makes compliance harder than it should be:

Your HR team handles enrollment, onboarding, payroll, and benefits administration. Compliance gets squeezed out by day-to-day tasks.
You rely on your insurance carrier for plan documents, but carriers provide certificates of coverage, not ERISA-compliant plan documents.
You may not have a benefits attorney on retainer, so legal questions pile up until renewal season.
Form 5500 filing and wrap documents require specialized knowledge that many HR generalists do not have.

This is where working with a dedicated benefits advisor makes a measurable difference. At Washington Health Insurance Agency, every client receives an annual benefits compliance attorney subscription as part of our advisory package. That means your team has year-round access to a compliance attorney who can review plan documents, prepare wrap documents, answer ERISA questions, and help you stay ahead of filing deadlines.

We also help Washington employers evaluate whether their current plan structure, whether fully insured or level-funded, aligns with their compliance capacity. Self-funded plans, for example, bring additional ERISA obligations that require more hands-on fiduciary oversight.

WHIA works with small groups and large groups across Washington State. Whether you have 25 employees or 250, our team evaluates your compliance posture alongside your benefits strategy so you can address gaps before they become penalties.

Frequently Asked Questions About ERISA Compliance

Does ERISA apply to small businesses?

Yes. ERISA applies to any private-sector employer that sponsors an employee benefit plan, regardless of size. Even a company with five employees and a group health plan is subject to ERISA. The only exception based on size is COBRA, which applies to employers with 20 or more employees. For more on health insurance requirements for small businesses, see our dedicated guide.

What is the difference between ERISA and ACA compliance?

ERISA governs the administration and management of employee benefit plans (health, retirement, disability). The ACA (Affordable Care Act) sets rules for health coverage specifically, including the employer mandate for companies with 50+ full-time equivalent employees and marketplace reporting requirements. Both laws apply simultaneously to employer health plans, so you need to comply with each. Learn more about group health insurance requirements.

Do I need a wrap plan document if I only have one health plan?

Yes. Even with a single carrier, you still need a document that includes all ERISA-required provisions (named fiduciary, plan administrator, claims and appeals procedures, ERISA rights statement). Your carrier’s certificate of coverage does not contain all of these elements. A wrap document fills the gap.

How often should I update my SPD?

You must distribute a Summary of Material Modifications (SMM) within 210 days after any plan year in which a significant change occurs. At minimum, you should review and update your SPD annually during open enrollment to reflect any carrier, plan design, or eligibility changes.

Can I be personally liable for ERISA violations?

Yes. ERISA imposes personal liability on plan fiduciaries who breach their duties. If you are the named plan administrator, business owner, or a member of the benefits committee, you could be required to restore losses to the plan from your personal assets. This is why documenting your decision-making process and working with qualified advisors is so important.

Take the Next Step Toward Full ERISA Compliance

ERISA compliance is not a one-time project. It is an ongoing responsibility that touches plan documents, fiduciary decisions, claims procedures, government filings, and employee communications. The checklist above covers the essentials, but every employer’s situation is different.

Washington Health Insurance Agency helps businesses across Washington State build benefits programs that are not just cost-effective, but compliant from day one. Our advisory package includes a compliance attorney subscription, annual plan document review, Form 5500 support, and year-round access to a dedicated account manager who knows your business.

Schedule your free benefits consultation today and let us show you how WHIA can take the compliance burden off your plate.