QUESTION: We would like to post the SPD for our company’s health and welfare plan on the company intranet instead of delivering paper copies to participants. Would this delivery method satisfy ERISA?
ANSWER: Yes, if certain requirements are met. ERISA requires that SPDs be delivered in a manner that is “reasonably calculated to ensure actual receipt.” The DOL provides a safe harbor under which electronic delivery, including posting on an intranet website, will be deemed to satisfy this standard. The safe harbor sets forth general requirements for all electronic disclosures and additional requirements for disclosures to recipients who do not have work-related computer access. Keep in mind that electronically furnished SPDs must meet the underlying SPD content, format, and other requirements.
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General Electronic Disclosure Requirements. At the time the SPD is furnished electronically, a notice must be provided to each recipient describing the document’s availability and significance along with the right to request a paper SPD at no charge. Steps must be taken to ensure that the intranet posting results in actual receipt, such as placing a prominent link to the SPD webpage on the intranet homepage, maintaining the SPD on the website for a reasonable period of time, and using return-receipt or notice of undelivered email features or conducting periodic reviews to confirm receipt of notices regarding the SPD’s availability. For employees with the ability to effectively access documents at any location where the employee reasonably could be expected to perform employment duties and whose computer access is an integral part of those duties, no additional requirements apply.
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Individuals Without Work-Related Computer Access. Additional requirements apply to electronic distribution to employees without the requisite work-related computer access and non-employees such as COBRA qualified beneficiaries. These individuals must be furnished with a notice that describes the types of documents that will be provided electronically, how to update the individual’s electronic delivery address, procedures for withdrawing consent, and several other elements. After receiving this notice, the individual must affirmatively consent to electronic disclosure “in a manner that reasonably demonstrates the individual’s ability to access information in the electronic form that will be used.” Also, changes in hardware or software requirements require a new explanation and consent. For individuals in this category who do not consent as required, electronic delivery will not fall within the safe harbor; paper delivery is recommended.
Use of a safe harbor method is not required, but compliance with a safe harbor ensures that the DOL (and, generally, the courts) will find a plan’s electronic delivery method consistent with the requirement that documents be furnished by a method reasonably calculated to ensure actual receipt. Providing the notice of the SPD’s availability is crucial, as posting the SPD on a company intranet without notifying recipients is insufficient, akin to simply leaving the SPD in an area frequented by employees. Also, note that additional requirements may apply for documents other than SPDs—for example, additional precautions are required when material distributed electronically includes personal information.
For ERISA retirement plan disclosures, two other electronic delivery safe harbors are available—email delivery and a “notice-and access” method for internet posting (see our Checkpoint article). However, these safe harbors are not available for health and welfare plan disclosures.
For more information, see EBIA’s ERISA Compliance manual at Section XXIII.B (“DOL Regulatory Safe Harbor”). See also EBIA’s Self-Insured Health Plans manual at Section XXVIII (“Participant Disclosure Requirements for Self-Insured Health Plans”) and EBIA’s 401(k) Plans manual at Section XXVIII.G (“Electronic Delivery of SPDs and Other ERISA-Required Documents”).
Contributing Editors: EBIA Staff.
