Insights

We would like to minimize our plan’s printing costs. Can employers use their benefit administration portal or intranet to distribute required notices and other plan documents to employees?


Many companies are moving toward electronic distribution of documents, such as placing those documents on a benefit administration portal or intranet. When it comes to distribution of documents required under ERISA (such as SPDs, other plan documents and annual notices), the regulations allow for electronic distribution as long as the employer follows the DOL's safe harbor rules regarding electronic disclosure.

Specifically, the regulations recognize two groups of employees — those who “have electronic access as an integral part of their job” and those who don’t. Although this determination is facts-and-circumstances-based, the categories are determined by whether the employee has the ability to access electronic documents at a location where they are reasonably expected to perform their duties.

The first group of employees, those with “electronic access as an integral part of their job,” are not simply employees with company emails or who have access to a computer or electronic kiosk at work; instead, they actually have the ability to access electronic documents at a location where they actually work every day. As such, an employer would need to assess their workforce to determine which (if any) of their employees fit in this category.

With that clarification in mind, documents may be provided electronically to employees who have electronic access as an integral part of their job. However, the employer must take the necessary steps to ensure that the email or other electronic system: results in actual receipt of transmitted information (which would be satisfied by return receipts or failure to deliver notices), protects the employee's confidential information, maintains the required style/format/content requirements, includes a statement as to the significance of the document, and provides a statement as to the right to request a paper version. Further, if participants fall into this category, then no consent to electronic disclosure is required.

On the other hand, if certain employees do not have electronic access as an integral part of their job, they may provide the employer with an email address to provide notices, and the employee must affirmatively give consent to electronic notices before the documents are provided. The email must explain what documents will be provided electronically, that their consent can be withdrawn at any time, procedures for withdrawing consent and changing the email address, the right to request a paper copy of the document and if there is an applicable fee, and what hardware or software will be needed.

Further, the second group of employees (those without electronic access as an integral part of their jobs) have to give their consent for the employer to distribute the plan notices to them electronically. If certain employees do not give their consent, then the employer should distribute a hard copy to them through the mail or in person (as long as precautions are taken to ensure that the employer can prove that the employee received it).

Therefore, employers who want to post documents on their benefits administration portal or intranet must meet the requirements of the DOL’s electronic disclosure safe harbor.

Keep in mind, though, that the employer should also consider the nature and distribution requirements of the documents that they are seeking to electronically distribute. For example, the COBRA initial/general notice is unique, in that it must be distributed to enrolled employees and their spouse. So it may be difficult to ensure actual receipt by the employee’s spouse by placing the notice on a benefit administration portal or on the intranet. Instead, best practice would be to mail the notice to the address on file with the envelope and notice addressed to both the employee and spouse.