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How to Electronically Distribute ERISA-Required Documents (Benefit Minute)

Tina Bull • Mar 1st, 2017

Distribution of ERISA-required documents is challenging for employers.  Hard copy distribution is inefficient, costly, not environmentally friendly and out-of-date in the digital age.  However, electronic distribution must be accomplished in a manner that complies with Department of Labor (DOL) requirements and results in actual receipt by plan participants.  

Documents that are distributed under ERISA’s rules include:

  • Summary Plan Descriptions and Summary of Material Modification;
  • Summary Annual Report;
  • HIPAA wellness program notice of availability;
  • Notice of Special Enrollment Rights;
  • WHCRA initial notice and annual notice;
  • NMHPA notice;
  • CHIPRA notice;
  • Summary of Benefits & Coverage (although other distribution options may also apply); and
  • COBRA notices.

Non-ERISA notices that follow the DOL guidelines for electronic distribution include the ACA Marketplace Notice and Medicare Part D creditable/non-creditable coverage notice.  Affirmative consent is always required for the HIPAA Privacy Notice.    

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DOL Safe Harbor

DOL regulations provide a safe harbor that lists specific circumstances under which documents may be furnished electronically.  While the safe harbor applies to both employees and non-employees, the requirements are more difficult to meet when electronically distributing documents to non-employees and to employees who do not have work-related access to the employer’s electronic delivery system.

To satisfy the safe harbor, the plan administrator must:

  • provide the documents in a manner that in both form and substance is equivalent to that which is furnished in hard copy;
  • ensure that the method of electronic distribution results in actual delivery of the electronic documents (for example by using a return receipt function within an email system or periodic reviews or surveys to determine the integrity of the system); and
  • provide notice through electronic means or in writing of the documents being received electronically, the significance of the documents, and the right to receive a paper copy of each document free of charge. 

Employees With Work-related Access

If access to the employer’s electronic information system is integral to an employee’s job duties and the employee has the ability to access electronic documents at any location where the employee performs employment duties, then electronic documents may be provided automatically.  These documents may be included as an attachment to an e-mail or as a link to a website where the documents can be accessed.  The required notice is provided via the e-mail or other information that includes the attachment or link.  If a password is required to access the website or the documents, directions to obtain a password should be included.

The DOL safe harbor also allows distribution via a posting to the employer’s continuous access website as long as a prominent link is included on the website home page.  The homepage should also include the required notice regarding the importance of the information posted.  A website posting without the prominent link or without providing the required notice does not meet safe harbor requirements.

Employees Without Work-related Access

If access to the employer’s electronic information system is not integral to an employee’s job duties, then the DOL safe harbor rules require affirmative consent before documents can be provided electronically.  Employees in this category include those who rely on computer kiosks available at a central location for shared use.

The consent must occur after the individual has been provided the following information:

  • the types of documents that will be provided electronically;
  • that consent can be withdrawn at any time without charge and the procedures for withdrawing consent or updating information;
  • the right to request a paper copy of the document free of charge; and
  • hardware/software requirements for electronic delivery.

In general, the consent should be in electronic form to demonstrate the individual’s ability to access the electronic information.  Revised consent is needed when there are system changes to hardware or software.  It may be possible to obtain the affirmative consent in another manner when the e-mail address is employer-provided and when the electronic system is maintained by the employer (since the employer knows the hardware and software requirements).  However, these employees must be given an opportunity to provide an alternate electronic address for receipt of documents, in which case the general requirements apply.

Non-employees

Electronic distribution to non-employees is the most cumbersome for an employer because affirmative consent with all of the general requirements applies.  This means the employer must obtain consent electronically, must obtain revised consent for any hardware or software changes and must maintain an up-to-date listing of personal e-mail addresses.  In many cases, it is more practical to distribute ERISA-required documents to this population in hard copy.

Electronic Distribution Policy

Employers wishing to distribute ERISA-required documents electronically should evaluate the various employee and non-employee populations to establish best practices for distribution to each group.  Employers should also consider a written policy that lists the documents that will be distributed electronically and the process that will be followed to ensure that such documents are actually delivered to participants as required by ERISA.

Disclosure Information
Information contained herein is generic in nature and provided by sources believed to be reliable. It is for informational purposes only and is not guaranteed as to accuracy, may not reflect our current opinion, and is not intended to replace the advice of a qualified professional.   All rights reserved. No reproduction in whole or in part is permitted without the express written consent of PSA. PSA Insurance & Financial Services, its affiliates and employees are not responsible for the content of other web or social networking sites.  PSA Financial Advisors, Inc. is a Registered Investment Advisory firm located at 11311 McCormick Road, Hunt Valley, MD 21031, and may only transact business in those states in which they are registered or exempted from registration.  Contact our office at 410 821-7766.  To protect your privacy, do not send personal information via the internet.

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About the Author: Tina Bull, VP of Compliance Services for the Employee Benefits practice, is responsible for managing and overseeing all activities of the Compliance Services Department. She advises and assists clients with respect to health/welfare plan design, administration and communication, with focus on current benefit laws and regulations. Tina’s areas of expertise include: Internal Revenue Code and ERISA requirements for health and welfare benefit plans; Internal Revenue Code Section 125 cafeteria plan implementation and administration; COBRA administrative requirements; HIPAA administrative simplification, privacy and security compliance and benefit taxation issues. In addition to conducting internal training for employee benefits staff, she has spoken at numerous seminars on regulatory compliance issues.