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Electronic Disclosure of ERISA Documents

Federal law (ERISA) requires that employers provide certain documents relating to their employee benefit plans to the people who are covered by the plans. The U.S. Department of Labor (DOL) has issued regulations that permit many of those document to be provided electronically, but subject to specific conditions. The regulations are published at 29 CFR § 2520.104b-1, and on the internet at http://www.access.gpo.gov/nara/cfr/cfr-table-search.html

This summary provides a general overview of the electronic disclosure regulations. Specific questions should be directed to an attorney who is familiar with employee benefit law and the regulations.

General Rule And Safe Harbor

The general rule for disclosure of ERISA documents is that they must be furnished in a manner reasonably calculated to ensure actual receipt. The regulations on electronic disclosure are a "safe harbor," meaning that if their requirements are met, the disclosure will be considered to have been made in a manner reasonably calculated to ensure actual receipt. Electronic disclosure may be made in other manners, but if the disclosure is made outside of the safe harbor, DOL or the intended recipients of the documents may challenge the electronic disclosure as not being appropriate.

Documents That May Be Disclosed Electronically

Under the DOL regulations, any documents required to be provided under Title I of ERISA may be disclosed electronically. This includes:

  • Summary plan descriptions (SPDs);
  • Summaries of material modifications (SMMs);
  • Summary annual reports (SARs);
  • Notices relating to qualified domestic relations orders (QDROs);
  • Notices relating to qualified medical child support orders (QMCSOs);
  • HIPAA certificates of creditable coverage;
  • Notices of COBRA rights;
  • Individual pension benefit statements; and
  • Information about plan loans.

Persons To Whom Electronic Disclosures May Be Made

Electronic disclosure may be made to "participants" (employees who are covered by the plan), "beneficiaries" (for example, spouses and dependents who are covered by the plan), and "other persons" entitled to documents under Title I of ERISA (for example, the custodial parent of a child covered by a QMCSO). Electronic disclosures are subject to very specific conditions, including whether the intended recipient must give consent in order for the documents to be furnished electronically.

Electronic Disclosure To Participants, Without Consent

Electronic disclosures to a participant, inside or outside the workplace, meet the requirements of the safe harbor without the specific consent of the participant, if the disclosures meet the following requirements:

  • The participant has the ability to access documents furnished in electronic form at any location where the participant is reasonably expected to perform his or her duties as an employee; and
  • Accessing the electronic information system is an integral part of the participant's duties as an employee.

DOL has specifically disapproved the use of kiosks or computer stations located in common areas of the workplace where employees can access the electronic information system.

Electronic Disclosure To Participants, Beneficiaries, And Other Persons, With Consent

A plan's electronic disclosures to a participant that do not meet the requirements set out above, and any disclosures to a beneficiary or other person, meet the safe harbor requirements of the regulations if:

  • The intended recipient has affirmatively consented to receive the documents electronically and has not withdrawn the consent;
  • For documents to be furnished by the internet or other electronic communication network (as opposed to on CD, DVD, or other media), the intended recipient has affirmatively consented, or confirmed consent, electronically and in a manner that reasonably demonstrates the individual's ability to access information in the electronic form that will be used and has provided an address for the receipt of such information;
  • Prior to consenting, the intended recipient is provided a clear and conspicuous statement indicating:
    • the types of documents to which the consent applies;
    • that consent can be withdrawn at any time without charge;
    • the procedures for withdrawing consent and for updating the address for receipt of electronic documents;
    • the right to a paper version of an electronically furnished document, and whether there will be a charge for the paper version; and
    • any hardware and software requirements for accessing and retaining the documents;
  • After consenting, if a change in the hardware or software needed to access or retain electronic documents creates a material risk that the individual will be unable to access or retain electronically furnished documents, the intended recipient:
    • is provided with a statement of the revised hardware or software requirements;
    • is given the right to withdraw consent without charge and without the imposition of any condition or consequence that was not disclosed at the time of consent; and
    • again consents to the receipt of documents through electronic media.

General Requirements

To qualify for the safe harbor, a plan making electronic disclosures must take appropriate and necessary measures reasonably calculated to ensure that the system:

  • Results in actual receipt of the documents (for example, by using return receipt or notice of undelivered e-mail features or conducting periodic reviews or surveys to confirm receipt); and
  • Protects the confidentiality of personal information relating to accounts and benefits (for example, by using features designed to prevent unauthorized receipt of or access to such information, although DOL refused to take a position on whether PINs, passwords, or similar features would be sufficient).

Style, Format, And Content Of Documents Disclosed Electronically

Documents that are disclosed electronically must be consistent with the style, format, and content requirements that otherwise apply to the particular document. (For example, an SPD that is disclosed electronically must include the full statement of ERISA rights that is required to be in all SPDs.)

Notice Requirements

When a document is furnished electronically, the intended recipient must be notified of the significance of the document, if its significance is not otherwise evident. (For example, an SMM that changes the benefits provided by a plan, and is titled simply "Summary of Material Modifications," should also be accompanied by a notice stating that the SMM describes changes to the benefits provided by the plan.)

In addition, the intended recipient must be notified of the right to request a paper version of the document.

Charges For Paper Copies Of Documents Furnished Electronically

The plan may not impose a fee for a paper copy of a document that is furnished electronically if the plan is otherwise required to furnish the document without charge, such as an SPD. However, if the plan is otherwise permitted to charge a fee for a document, such as for a bargaining agreement or a trust agreement, and the document is available electronically but a paper copy is requested, the fee may be imposed.

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Date

04.01.03

Type

Publications

Authors

Mellin, Matthew P.

Related Legal Boutiques

Benefits/ERISA