Electronic Distribution of Employee Benefit Notices and Disclosures

A growing number of plan administrators (i.e., employers sponsoring employee benefit plans) are interested in electronically providing plan-related documents/disclosures to plan participants. When assessing whether electronic distribution should be used, plan administrators should consider the nature of the disclosure document and the category of employee(s) receiving the disclosure material. The information below is intended to outline the various electronic disclosure rules as they apply to employee benefit and group health plan-related material. Plan administrators are encouraged to consult with their employee benefits legal counsel for specific guidance regarding their document distribution methods and compliance with the applicable disclosure requirements.

Note: A chart outlining various employee benefit notices and applicable electronic disclosure requirements can be found at the end of this overview.

ERISA Documents

ERISA requires plan administrators to provide various documentation to individuals either automatically or upon request. To help remain compliant in fulfilling their disclosure obligations, the Department of Labor (DOL) allows plan administrators to deliver certain ERISA welfare plan notices and disclosures (e.g., SPDs, SMMs, SARs, etc.) electronically (e.g., via email or by posting the documents on a website) if the delivery satisfies certain requirements under an electronic disclosure safe harbor. Plan administrators should note that even if a plan administrator meets the requirements set forth under the ERISA electronic disclosure safe harbor, the plan administrator must also comply with other ERISA document requirements related to the timing, content, style, etc. of the documents.

Safe Harbor – General Disclosure Rules

To fulfill their disclosure obligations under ERISA, whether electronically or otherwise, plan administrators must do the following:

• Use measures reasonably calculated to determine actual receipt of the material by plan participants, beneficiaries and other specified individuals; and
• See that the method(s) used for delivery is likely to result in full distribution.

Specifically, plan administrators electronically furnishing documents must take appropriate and necessary measures reasonably calculated so that the system for furnishing documents:

“(A) Results in actual receipt of transmitted information (e.g., using return-receipt or notice of undelivered electronic mail features, conducting periodic reviews or surveys to confirm receipt of the transmitted information); and

(B) Protects the confidentiality of personal information relating to the individual’s accounts and benefits (e.g., incorporating into the system measures designed to preclude unauthorized receipt of or access to such information by individuals other than the individual for whom the information is intended).”¹

The preamble to the DOL regulations provides the following examples of “appropriate and necessary measures to ensure the website system for furnishing documents results in actual receipt.”²

• The website homepage should contain a prominent link to the website sections that contain information about the plan.
• The website should include directions on how to obtain a replacement for a lost or forgotten password to the extent one is needed.
• Disclosure documents should remain on the website for a reasonable period of time after participants and beneficiaries are notified of their availability

¹ 29 CFR § 2520.104b-1(c)
² 29 CFR § 2520.104b-1(c)