Plan Document Amendments

When you change your health plan, the governing document must be formally amended and participants notified through a Summary of Material Modifications. Both are required under ERISA.

See the Step-by-Step ProcessView the Adoption Checklist

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ERISA wrap documents, SPDs, and required disclosures must be drafted correctly and distributed on time. ABY can prepare and maintain your ERISA documents so they stay current and compliant.

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What A formal change to a health plan's governing document to reflect updates in benefits, eligibility, contributions, or legal requirements, accompanied by a Summary of Material Modifications (SMM) distributed to participants.
Who All employers sponsoring ERISA health plans, whether self-funded or fully insured with a wrap document.
When Whenever plan terms change or law requires an update. Some amendments have fixed statutory deadlines; others should be adopted no later than the end of the plan year in which the change occurred.
Risk IRS/DOL penalties, participant lawsuits, and potential loss of tax-favored status if the plan operates without updated documents or fails to notify participants of material changes.
60
Days for benefit reductions

A material reduction in covered services or benefits requires the SMM within 60 days after adoption of the change.

210
Days for other changes

Other material modifications require the SMM within 210 days after the end of the plan year in which the change occurred.

EOY
Adopt the amendment

Absent a fixed statutory deadline, adopt the plan document amendment no later than the end of the plan year of the change.

Trigger SMM Deadline Notes
Material reduction in covered services or benefits Within 60 days after adoption of the change The strictest deadline; applies any time benefits are cut, coverage is restricted, or cost-sharing increases. Do not wait until year-end.
Other material modifications (non-reduction changes) Within 210 days after end of the plan year in which the change occurred More flexibility, but still a hard deadline. Best practice is to issue the SMM well before the 210-day mark.
Legally mandated amendment (ACA, MHPAEA, SECURE 2.0, and so on) As specified by the applicable law Each law sets its own adoption deadline. Track statutory deadlines separately from the general ERISA amendment calendar.
Annual plan year review (no specific change) No fixed deadline; best practice is before end of plan year Confirms the document still reflects actual plan operations. Catch drift before it becomes a compliance problem.
Trigger: Material reduction in benefits
SMM deadline: Within 60 days after adoption
Notes: Strictest deadline; do not wait until year-end.
Trigger: Other material modifications
SMM deadline: Within 210 days after plan year-end
Notes: Best practice is well before the 210-day mark.
Trigger: Legally mandated amendment
SMM deadline: As specified by the applicable law
Notes: Track statutory deadlines separately.
Trigger: Annual plan year review
SMM deadline: No fixed deadline; before plan year-end
Notes: Confirms the document reflects actual operations.
  • Current plan document: The governing document as last amended; amendment language must integrate cleanly with existing text.
  • Current SPD: The SMM will reference and update provisions in the existing SPD.
  • Description of the change: Exact terms of the benefit, eligibility, or operational change being made, including the effective date.
  • Board or committee resolution: Formal authorization from the appropriate fiduciary body approving the amendment.
  • List of affected participants: Needed to confirm proper distribution of the SMM.
  • Legal counsel: Amendment language itself requires a benefits attorney or qualified ERISA counsel; this is not a template task. The SMM notice is more standardized; see Templates & Resources below.
1
Identify the changeDefine exactly what is changing: benefit design, eligibility criteria, contribution amounts, funding arrangement, or compliance update. Determine whether it is a material reduction or other material modification, since that determines the SMM deadline.
2
Engage counselHave a benefits attorney draft the amendment language. Provide them with the current plan document, a description of the change, and the intended effective date.
3
Adopt formallyHave the appropriate fiduciary body (board, plan committee, or HR if delegated) approve the amendment by resolution. Document the approval with a signed resolution and date of adoption.
4
Update the plan documentIncorporate the amendment into the plan document. If your plan uses a restated document, restate it with the amendment integrated. If it uses a separate amendment schedule, attach the signed amendment.
5
Prepare and distribute the SMMDraft the Summary of Material Modifications describing the change in plain language. Distribute to all affected participants within the applicable deadline (60 days for reductions; 210 days after plan year-end for other changes). See the Summary of Material Modifications page for the template.
6
Update the SPDThe next full SPD restatement (required every 5 years, or every 10 years if no changes) must incorporate all amendments. The SMM bridges the gap in the meantime.
7
File and documentSave the signed amendment, resolution, and proof of SMM distribution. Retain for at least 6 years.
  • Who receives it: All plan participants (and beneficiaries currently receiving benefits) affected by the change. If the change affects only a subset, only that subset needs to receive it, but when in doubt, send to all.
  • Paper delivery: First-class mail to last known address, or hand delivery. Both satisfy ERISA's disclosure requirements.
  • Electronic delivery: Permitted if the employer follows DOL electronic disclosure rules, either the 2002 safe harbor (written consent required for non-computer-work employees) or the 2020 safe harbor (notice-and-access model for ERISA plans). See the DOL e-disclosure guidance for specifics.
  • Plain language: The SMM must be written in a manner calculated to be understood by the average plan participant. Avoid legal jargon; describe what changed and what it means for the participant's coverage.
  • Signed amendmentSigned plan document amendment, including effective date.
  • ResolutionBoard or committee resolution authorizing the amendment, signed and dated.
  • SMM copyCopy of the SMM as distributed to participants.
  • Proof of distributionMailing log, email delivery records, or electronic disclosure system confirmation.
  • RetentionRetain all of the above for at least 6 years from the date of filing or adoption (ERISA § 107 standard).

Common traps

Operating inconsistently with the plan document: Making a benefit change effective January 1 but not adopting the formal amendment until the following year, or never. If the plan is audited or litigation arises, the written document governs, not what HR told employees.
Missing the 60-day SMM deadline for benefit reductions: Employers often treat the 60-day deadline like the 210-day deadline. A benefit cut with a late SMM is both a disclosure violation and potential grounds for a participant claim.
Issuing the SMM without actually amending the document: The SMM notifies participants of a change; it does not itself amend the plan. Both steps are required; the SMM is not a substitute for the formal amendment.
DIY amendment drafting: Amendment language that is imprecise, internally inconsistent, or conflicts with existing plan terms can create ambiguity that courts resolve against the employer. This is a task for a benefits attorney.

FAQs

What triggers the need for an amendment?
Any change to eligibility rules, benefit levels, covered services, cost-sharing, contributions, funding arrangement, or a legal requirement that mandates a plan update. If the plan is operating in any way that differs from what the plan document says, an amendment is likely overdue.

Who is responsible for adopting amendments?
The plan administrator (typically the employer or an HR/benefits committee) is responsible, acting in its fiduciary capacity. Formal adoption usually requires a resolution from whoever has amendment authority under the plan document (often the board of directors or a named committee).

Does an SMM need to be a standalone document, or can it be incorporated into open enrollment materials?
It can be incorporated into open enrollment materials as long as the material modifications are clearly identified and the document is written in plain language. However, the timing rules still apply; if the change is a material reduction, the SMM must go out within 60 days regardless of open enrollment timing.

What if no one reads it?
Doesn't matter; ERISA imposes the obligation to send it, not to guarantee it's read. Proof of distribution (mailing log, delivery confirmation) is what protects the employer in a dispute.

  • Governmental plans: Government employer health plans are generally exempt from ERISA, which means the amendment and SMM requirements described here may not apply. Governmental plans are typically governed by applicable state or local law and the plan's own governing documents. Confirm requirements with your legal counsel.
  • Church plans: Church plans that have not elected ERISA coverage are also exempt from ERISA's amendment and disclosure rules. Elected ERISA church plans follow the standard requirements.
  • Collectively bargained plans: Amendments to benefits covered under a collective bargaining agreement typically require negotiation with the union before adoption. Unilaterally amending benefits that are mandatory subjects of bargaining is an unfair labor practice.
  • Retroactive amendments: ERISA generally prohibits retroactive amendments that reduce benefits already accrued. A retroactive amendment that restores or expands benefits may be permissible, but confirm with counsel before backdating any amendment effective date.
  • Legally mandated amendments with fixed deadlines: ACA, MHPAEA, No Surprises Act, and similar laws set their own amendment adoption deadlines that may be earlier than the standard ERISA calendar. Track these separately and adopt them on time regardless of your regular amendment cycle.

Amendment language requires a benefits attorney; no template substitutes for qualified legal drafting. The adoption checklist below covers the full amendment process.

For the SMM template used to notify participants, see the Summary of Material Modifications page.

Plan Amendment Adoption Checklist

Use for every amendment cycle. Complete all steps; skipping any one of them creates a compliance gap.

  • ☐ Change identified and documented (benefit, eligibility, contribution, or legal requirement)
  • ☐ Classified as material reduction (60-day SMM deadline) or other material modification (210-day deadline)
  • ☐ Benefits attorney engaged to draft amendment language
  • ☐ Amendment language reviewed and approved by HR/benefits team
  • ☐ Formal resolution adopted by board or plan committee with signature and date
  • ☐ Plan document updated to incorporate the amendment
  • ☐ Effective date confirmed and documented
  • ☐ SMM drafted in plain language describing the change (template on the SMM page)
  • ☐ SMM distributed to all affected participants within the applicable deadline
  • ☐ Proof of distribution documented (mailing log or electronic delivery confirmation)
  • ☐ Amendment, resolution, and proof of distribution filed, retain minimum 6 years
  • ☐ SPD restatement calendar updated (incorporate this amendment at next full restatement)