Distribution of Electronic Documents

Written by: Jonathan Pigeon, Account Manager

As you go through your group’s renewal this year, consider the distribution of summary plan descriptions (SPDs) and other appropriate employee communications.  Furnishing documents electronically requires an ongoing program that must be monitored.  If you have the resources, this is a great way to make files easily accessible to employees who use a computer the majority of their day.  Although electronic versions are wonderful, they may not be right for your group.  Whatever you decide to do, keep in mind how you would fare in a benefit plan audit or what your exposure to possible litigation will be.

US_Dept_of_Labor

There is a recent court decision that ruled against an employer for failing to furnish employees a copy of their voluntary life insurance SPD.  The employer, at the time of the lawsuit, made their SPDs available via an intranet site.  Without going into great detail, the judge ruled that simply posting an SPD on an employer’s intranet does not satisfy ERISA’s requirements to notify employees of their rights and obligations. “Materials which are ‘required’ to be furnished to all participants … must be sent by a method or methods of delivery likely to result in full distribution,” the court concluded.”

Basic Delivery Rules of Electronic Documents:

  1. Rules automatically extend to any employee who can access electronic documents at any location where he or she works and whose access to the employer’s electronic information system is an integral part of his or her duties.
  2. Employer must receive receipt from employee that documents were received by the employee
  3. Documents must be prepared with the style, format, and content that conforms to ERISA
  4. Employee must receive a notice along with the document describing the significance of the document in question
  5. When the document is delivered, the employee must be sent a receipt or notice educating the employee that they have a right to receive a paper copy of the document.
  6. There is more to the process than what is listed here, but this is the basic thrust of the electronic delivery rules.
  7. Employers must also combine the frequency and time frame of delivery of documents into their distribution method as well.
  8. See this link for details.

The Employee Benefits Security Administration (EBSA) provides a pamphlet to remind those that need to know when and how they must furnish various employee communications.  The DOL reference tool is broken into three sections:

  1. Basic Disclosure Requirements for Pension and Welfare Benefit Plans
  2. Additional Disclosure Requirements for Welfare Benefit Plans That Are Group Health Plans
  3. Additional Disclosure Requirements for Pension Plans

The pamphlet is not an all inclusive guide as there are notices and disclosures that are not included such as disclosure requirements for the Employee Retirement Income Security Act (ERISA), Internal Revenue Code, and items under the authority of the Department of the Treasury and Internal Revenue Service (reference page 1 of the booklet).