Is Electronic Distribution for You?
The benefits renewal season is upon us and so are the many compliance requirements that come along with it. For any private sector welfare plan that is covered by the Employee Retirement Income Security Act (ERISA), this means plan sponsors are required to distribute certain documents to plan participants.
Although many employers distribute these items the via paper handouts, others are adopting electronic delivery to meet the progressive workforce. However, there’s more to it than just clicking the “send” button. The Department of Labor (DOL) has issued very specific guidelines on how to electronically distribute ERISA documents to participants while maintaining compliance.
Under the DOL safe harbor requirements for distributing electronic plan documents, employers must adhere to the following guidelines in order to meet compliance requirements:
- Plan administrator must take reasonably calculated steps to ensure the system protects confidentiality of personal information relating to the individual’s accounts and benefits;
- Electronically delivered documents must be prepared and furnished in manner consistent with style, format and content requirements applicable to the particular documents;
- Take steps to ensure actual receipt by the participant (ex: return receipt and undeliverable email features, periodic audits or surveys to confirm receipt); and
- Upon request, the participant, beneficiary or other individual must be furnished a paper version of the electronically furnished documents
In addition to the safe harbor requirements, employers must also obtain an “ Affirmative Consent for Electronic Distribution ” if the participants receiving the documents electronically do not use a computer as part of their jobs (ex: retirees, field workers, COBRA recipients, etc). Consent must be given in a manner that reasonably demonstrates the individual’s ability to access information in the electronic form that will be used to provide the information. Prior to consenting, the individual must be provided with a clear and conspicuous statement indicating:
- The types of documents the consent applies to;
- Ability to withdraw consent at any time;
- Procedures for withdrawing consent and for updating the participants receipt address;
- The right to request and obtain a paper version of the document(s) free of charge; and
- Any hardware and software requirements for accessing and retaining the document(s)
Although there are sample affirmative consent forms available on the internet for employers to reference, it is strongly encouraged employers consult with legal benefits counsel for their final affirmative consent form.
With the different types of workers that make up a workforce and given the substantial use of the internet, it is very tempting to just click “send” and be done with the task. However, if not done correctly the DOL may use this same technology to come knock on your door. If you can’t fully meet the electronic distribution requirements, don’t chance it – stick to the tried and true paper distribution.