Electronic Distribution of Welfare Plan Information (Benefit Minute)

Posted in: Benefit Minute, Employee Benefits

ERISA and other federal regulations require that certain welfare benefit plan information be furnished to plan participants and beneficiaries. In general, these documents must be distributed and not just made available. Electronic distribution is often the preferred method because it is easier administratively, cost-efficient and environmentally friendly. However, the Department of Labor (DOL) and other regulatory agencies impose requirements on employers who want to distribute plan information electronically. Set forth below is a summary of those requirements.

DOL Rules for Electronic Distribution

The DOL regulations contain the following specific requirements for using an electronic method to distribute plan information:

  • The information must be equivalent in substance and form (i.e. style, format, content) to that which is furnished on paper.
  • The method of electronic distribution must result in actual receipt of the information, and the employer must take steps to insure actual receipt (for example by using a return receipt function within an email system or periodic reviews or surveys to determine the integrity of the system).
  • Paper form of the document must be available free of charge.
  • Each employee must receive notice through electronic means or in writing of the documents they are receiving electronically, the significance of the documents, and the right to receive a paper copy of each document free of charge.

Under the DOL rules, information may automatically be furnished electronically to participants who can effectively access the documents from a location where they are reasonably expected to perform duties as an employee and who must access the employer’s electronic information system (e.g. e-mail) as an integral part of employment duties. Computer terminals available at a central location for employees who do not use the employer’s electronic information system do not meet this requirement.

Participants who do not have electronic access at their work location must affirmatively consent to electronic distribution of documents. Before providing consent, the participant must be given a clear and conspicuous statement that includes:

  • the documents to which the consent applies;
  • the right to withdraw consent at any time without charge;
  • the procedures to withdraw consent or to change the address for receiving electronic information;
  • the right to request a paper version; and
  • the software or hardware requirements to access and retain electronic documents.

In addition, participants must provide an address to receive documents electronically and consent in a manner that reasonably demonstrates their ability to access the documents in the electronic form that will be used. Participants who do not provide consent must receive a paper copy.

When documents are housed on a company website, they should remain on the website for a reasonable period of time after individuals are notified of their availability. In addition, the website homepage should include a prominent link to the information and instructions on how to obtain a password if one is needed to access the information.

These DOL requirements for electronic distribution are a safe harbor to meet the ERISA disclosure requirements. Other methods for electronic distribution (e.g. sending a postcard with the web address where the documents can be found) are used but have not been specifically authorized by the DOL.

Documents to which the DOL Rules Apply

These DOL requirements apply to Summary Plan Descriptions, Summary of Material Modifications, Summary Annual Reports, COBRA notices (but consider requirement to provide to covered spouse/dependents), QMCSO notifications, CHIPRA notice, HIPAA certificates of creditable coverage, and the Exchange Notice.

Summary of Benefits and Coverage (SBC)

An SBC may be provided electronically to individuals who are eligible but not enrolled for coverage if:

  • the format is readily accessible (such as in html or pdf);
  • the SBC is provided in paper form free of charge upon request; and
  • if the SBC is provided via an Internet posting, the plan timely advises the individual that the SBC is available on the Internet and provides the Internet address. Plans may make this disclosure in either hard copy or by e-mail.

An SBC may be provided electronically to participants who are enrolled in a plan in accordance with the DOL rules for electronic distribution. In addition, under a separate DOL safe harbor, SBCs may be provided electronically to participants in connection with online enrollment for the plan. Finally, SBCs also may be provided electronically to participants and beneficiaries who request an SBC online. In all cases, the individual must have the option to receive a paper copy of the SBC upon request.

HIPAA Privacy Notices

HIPAA Privacy Notices are governed by the Department of Health and Human Services (HHS) and not the DOL. Under HHS rules, the Privacy Notice may be distributed electronically only with affirmative consent. The individual must agree to the electronic notice, and a paper copy must be provided if the electronic distribution fails or if the individual requests a paper copy.

If you have questions regarding this topics please visit our Employee Benefits department page or contact Tina Bull.


© PSA Insurance and Financial Services. Group insurance products offered through PSA Financial, Inc. This blog provides general information for your reference. Please see your benefits consultant to review your specific situation.

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