Summary of Material Modifications (SMM)

A plain-language notice ERISA requires you to send participants when a health plan makes a material change to benefits, eligibility, or other SPD information.

See the Step-by-Step ProcessView the SMM Template
What A written notice to plan participants and beneficiaries explaining significant changes to the plan's benefits, eligibility rules, or other SPD information.
Who All employers sponsoring an ERISA health plan must provide SMMs to participants and beneficiaries when material changes occur.
When Within 210 days after the end of the plan year in which the change was adopted; within 60 days for any material reduction in covered services or benefits.
Risk ERISA penalties, participant lawsuits, and audit exposure for untimely or missing notices. See the Plan Document Amendments page for the related obligation to formally amend the underlying plan document.
60
Days for benefit reductions

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

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 was adopted.

Trigger Deadline Who Sends Notes
Material reduction in covered services or benefits (benefit cut, coverage restriction, cost-sharing increase) Within 60 days after adoption Employer / Plan Administrator Strictest deadline. The clock starts when the change is adopted, not when it takes effect. Do not wait until year-end.
Other material modification to plan or SPD information (benefit expansion, eligibility change, administrative update) Within 210 days after end of plan year in which change was adopted Employer / Plan Administrator More flexibility, but still a hard deadline. Best practice is to issue well before the 210-day mark, not on the last day.
Multiple changes in the same plan year Apply the deadline for each change separately; reductions still trigger 60-day clock Employer / Plan Administrator A single SMM can cover multiple changes if all are issued within the applicable deadlines.
Trigger: Material reduction in benefits
Deadline: Within 60 days after adoption
Notes: Clock starts at adoption, not effective date.
Trigger: Other material modification
Deadline: Within 210 days after plan year-end
Notes: Best practice is well before the 210-day mark.
Trigger: Multiple changes in the same plan year
Deadline: Each change separately; reductions keep the 60-day clock
Notes: One SMM can cover several changes within their deadlines.
  • Current SPD and any prior SMMs: The new SMM supplements the existing SPD; review both to ensure consistency and avoid contradicting prior disclosures.
  • Approved plan amendment or board/committee authorization: The SMM should describe what was formally adopted, not what HR informally communicated.
  • Plain-language description of the change: Exactly what changed, effective date, and which participants are affected.
  • Distribution list: All current participants and beneficiaries receiving benefits under the plan.
  • SMM template: See Templates & Resources below.
1
Confirm the change is materialDetermine whether the modification is material enough to require an SMM. If uncertain, document your assessment and err on the side of issuing one; the risk of sending an unnecessary SMM is low, the risk of missing a required one is not.
2
Classify the changeIs it a material reduction in covered services or benefits (60-day clock) or another material modification (210-day clock)? This is the most important determination you make in the process.
3
Draft the SMMUse plain language: describe what changed, when it takes effect, and what it means for participants' coverage. Do not use legal or technical language that participants can't understand. Use the template in Templates & Resources below.
4
Obtain internal approvalHave the plan administrator or benefits committee sign off before distribution.
5
Distribute by the deadlineSend to all affected participants and beneficiaries via a permitted delivery method. Calendar the deadline before you start drafting so you don't lose track of it.
6
Document and archiveSave the final SMM, approval records, and proof of distribution. Retain with SPD records for at least 6 years.
  • Paper mail: First-class mail to each participant's last known address satisfies ERISA's delivery requirement. Keep a mailing log.
  • Hand delivery: Acceptable for on-site employees. Get a signed acknowledgment or distribute at a meeting with an attendance log.
  • Electronic delivery: Permitted under two DOL safe harbors: the 2002 safe harbor (requires affirmative consent from employees who don't use computers as an integral part of their job) or the 2020 safe harbor (notice-and-access model for ERISA welfare plans). If using e-delivery, track bounces and undeliverable messages and follow up with paper for any that fail.
  • Plain language requirement: The SMM must be written to be understood by the average plan participant, not the plan attorney. If your draft reads like a legal document, rewrite it.
  • Final SMM textThe SMM as distributed, including version date.
  • Approval recordsInternal approval records and effective date documentation.
  • Distribution logWho received it, delivery method, and date sent.
  • Electronic delivery recordsFor e-delivery: sent/delivery confirmation records; bounce log and documentation of any follow-up paper delivery.
  • RetentionRetain with SPD and plan records; 6 years minimum (ERISA § 107 standard).

Common traps

Applying the 210-day deadline to benefit reductions: This is the most common timing error. If the change reduces covered services, increases deductibles, or restricts benefits in any way, the 60-day clock applies from the date of adoption, not from year-end.
Writing in legal language: An SMM full of ERISA citations and defined terms does not satisfy the plain-language requirement and will generate participant complaints and calls to HR that a clear notice would have prevented.
No distribution documentation: Saying "we always mail these to everyone" is not proof. A mailing log, email delivery record, or attendance sign-in is what protects you when a participant claims they never received the notice.
Treating the SMM as a substitute for the amendment: The SMM notifies participants of a change; it does not itself amend the plan. Both are required when plan terms change. See the Plan Document Amendments page to amend the underlying document.

FAQs

What counts as a "material" modification?
Any change that a participant would consider significant in deciding how to use their benefits or evaluate the plan. Changes in covered benefits, cost-sharing, eligibility, claims procedures, and network are all clearly material. Minor administrative or contact information updates are not. When in doubt, err toward issuing an SMM; the downside of an unnecessary one is minimal.

Can we just issue an updated SPD instead of an SMM?
Yes. An updated SPD that incorporates the changes and is distributed within the applicable deadline satisfies the SMM requirement. In practice, an SMM is faster and cheaper to produce when only one or two things changed. A full SPD restatement makes more sense when changes are extensive or when the SPD is due for its periodic update anyway.

Does an SMM need to be a standalone document?
No. It can be incorporated into open enrollment materials, benefit guides, or other plan communications, as long as the material modifications are clearly identified and the timing requirements are met. A benefit reduction buried in 40 pages of enrollment materials is unlikely to satisfy the plain-language and clarity requirements, however.

What are the penalties for a late or missing SMM?
ERISA § 502(c) allows participants to sue for up to $110 per day per participant for failure to provide required plan documents and notices. DOL audits can result in additional penalties. Beyond formal penalties, a participant who was not notified of a benefit reduction has a strong argument that the reduction should not apply to them.

  • Multiple changes in one plan year: A single SMM can cover several modifications as long as each is clearly described and the applicable deadline is met for each. If one change is a material reduction and another is not, the 60-day clock governs the entire document unless you issue them separately.
  • Issuing an updated SPD instead: If enough has changed that a full SPD restatement is practical, distributing an updated SPD within the applicable deadline satisfies the SMM requirement.
  • Governmental and church plans: Plans exempt from ERISA are not subject to the SMM requirement as described here. Governmental plans are governed by applicable state or local law; church plans by their own governing documents. Confirm requirements with your legal counsel.
  • Non-material changes: If a change is assessed as non-material, document that assessment in writing and note it in the plan file. The change should still be incorporated into the next full SPD restatement.
  • Collectively bargained plans: Changes subject to collective bargaining may require union negotiation before adoption, which affects the starting point for the SMM deadline. The clock runs from adoption, and adoption may be contingent on CBA amendment.

A ready-to-use SMM template. Fill in the bracketed fields, have your plan administrator sign off, and distribute within the applicable deadline. Keep a copy with your plan records.

SUMMARY OF MATERIAL MODIFICATIONS (TEMPLATE)

[Company Name], [Plan Name]
Summary of Material Modifications

Date of this notice: _______________
Effective date of change: _______________
Plan year: _______________

This notice describes a change to your [Plan Name]. Please read it carefully and keep it with your Summary Plan Description (SPD).

What is changing:
[Describe the change in plain language. Be specific; participants should be able to understand exactly what is different. Example: "Effective January 1, [year], the annual in-network deductible will increase from $[old amount] to $[new amount] per individual and from $[old amount] to $[new amount] per family."]

Who is affected:
[Example: "This change applies to all employees and dependents enrolled in the [Plan Name] as of [date]." If only a subset is affected, name them specifically.]

Why this change is being made:
[Optional but recommended. Brief plain-language explanation, e.g., "This change reflects increased plan costs and is intended to keep the plan financially sustainable for all participants."]

What this means for you:
[One or two sentences on the practical impact. Example: "Beginning January 1, you will pay the first $[new amount] of covered in-network expenses out of pocket before the plan begins paying benefits. Your out-of-pocket maximum and covered services remain unchanged."]

Questions?
Contact [HR Contact Name] at [phone number] or [email address]. You may also contact the plan administrator at the address below.

[Plan Administrator Name]
[Address]
[Phone]

This Summary of Material Modifications supplements your Summary Plan Description. Keep this document with your SPD. It is issued pursuant to ERISA § 104(b)(1) and 29 CFR § 2520.104b-3.

SMM Distribution Checklist

  • ☐ Change classified: material reduction (60-day clock) or other material modification (210-day clock)
  • ☐ Deadline calculated and calendared
  • ☐ SMM drafted in plain language
  • ☐ SMM reviewed and approved by plan administrator or benefits committee
  • ☐ Distribution list confirmed, all current participants and beneficiaries receiving benefits
  • ☐ Delivery method confirmed (paper mail, hand delivery, or electronic per DOL safe harbor)
  • ☐ SMM distributed by deadline
  • ☐ Distribution log completed (who, how, when)
  • ☐ Bounces / undeliverables addressed with follow-up paper delivery
  • ☐ Final SMM and distribution records filed, retain minimum 6 years