The U.S. Department of Labor (DOL) has issued proposed regulations creating a new, additional safe harbor that ERISA-governed group health plan administrators can use to provide required disclosures electronically rather than in print. The proposed rule aims to modernize how group health plans deliver required disclosures to plan participants and others, making communication faster, more efficient and less costly.
Note that the new safe harbor would only apply to group health plans and not to other ERISA welfare benefit plans.
The regulations would apply starting January 1 of the first calendar year after publication of the final regulations. Employer plan sponsors and plan administrators would not be required to use the new safe harbor but could choose to do so at any time on or after the applicability date.
Note that the new safe harbor would only apply to group health plans and not to other ERISA welfare benefit plans, such as life insurance and disability benefits.
Background
Employer-sponsored benefit plans governed by ERISA must provide certain disclosures to participants, beneficiaries and other individuals. Generally, those disclosures must be delivered in ways that reasonably ensure that the intended recipients receive the information. For example, in-hand delivery to employees at their workplace is acceptable, as is delivery by first-class mail.
In 2002, the DOL established a safe harbor for using electronic distribution methods for those participants who can effectively access documents furnished in electronic form at work and whose access to the employer's or plan sponsor's electronic information system is an integral part of their work duties. Plan participants, beneficiaries and other individuals who do not fit into this category must affirmatively consent to receive documents electronically or be provided with paper copies.
In 2020, the DOL finalized a new optional safe harbor electronic distribution rule that applied to retirement plans but not to health and welfare plans. The 2020 retirement plan safe harbor allows plan administrators to furnish certain required disclosures using a “notice-and-access” model. The newly proposed regulations follow a similar notice-and-access model.
Proposed regulations
As noted above, the proposed regulations use a notice-and-access model that would permit employer plan sponsors of group health plans to satisfy the general disclosure requirements under ERISA. Following are highlights of the proposed regulations:
- Definition of “covered individual.” A covered individual includes a group health plan participant, beneficiary or other individual entitled to covered documents (see below) and who provides the employer, plan sponsor or plan administrator with an electronic address. An electronic address could be an email address or smartphone number where the covered individual can receive a written notice of internet availability. If an electronic address is assigned by an employer, the employee is treated as if they provided the electronic address
- Definition of “covered documents.” Covered documents include those that may be furnished using the new safe harbor (e.g., summary plan descriptions, summaries of material modifications, summary annual reports). The new safe harbor would apply to documents that the plan is required to provide and documents that are only made available by the plan upon request
- Notice of Internet Availability (NOIA) requirements. Generally, plan administrators must provide a NOIA for each covered document they provide under the new safe harbor. A plan administrator may combine a NOIA for one or more covered documents under certain circumstances. The proposed regulations also include timing requirements for the NOIA, as well as content, form and manner requirements
- Standards for internet website. Plan administrators must ensure the existence and maintenance of an internet website where a covered individual can access covered documents. (Note, website-related activities may be assigned to parties other than the administrator.) The disclosure of covered documents through email systems would not be permitted, since many ERISA-required disclosures include sensitive information, including protected health information (PHI) protected by the HIPAA privacy rule. For example, the DOL intends to avoid a circumstance where PHI is transmitted to an employee via their company email address, where the content may be monitored by the employer
- Participant protections. The following safeguards are included for covered individuals who want to receive paper copies of covered documents: (1) upon request from a covered individual, the plan administrator must promptly furnish, free of charge, a paper copy of a covered document; and (2) covered individuals must have the right, free of charge, to globally opt out of electronic delivery and receive only paper versions of covered documents. Plan administrators must establish and maintain reasonable procedures governing participant requests or elections; the system for furnishing a NOIA must be designed to alert the administrator of a covered individual’s invalid or inoperable electronic address
- Initial notification requirements. The plan administrator must notify each individual, before relying on the new safe harbor, that certain documents will be furnished electronically. The proposed regulations also include specific content, form and manner requirements for the initial notice
- Special rule for termination of employment. A plan administrator must take reasonable measures to maintain the accuracy of the electronic address following termination of employment
- Reasonable procedures for compliance if the website is temporarily unavailable. If covered documents are temporarily unavailable for a reasonable period due to technical maintenance or unforeseeable events, a plan administrator must have procedures in place to ensure that the covered documents are available in the manner required by the new safe harbor as soon as practicable
Going forward
Employer group health plan sponsors and plan administrators should:
- Review their current electronic delivery procedures (if any) for their ERISA group health plans to ensure compliance with the 2002 safe harbor for electronic distribution
- Review the proposed regulations and determine whether to submit comments by September 21, 2026
