Sarah Borders, CEBS July 8, 2024 4 min read

When Can the ERISA SPD and Notices be Sent to Employees Electronically?

The DOL safe harbor describes certain circumstances where ERISA plans may disclose documents electronically, including the Summary Plan Description (SPD). Under this safe harbor, plan administrators must use a method reasonably calculated to ensure actual receipt of the SPD. For example, the administrator could use a read-receipt, notice of undelivered e-mail, or run periodic reviews to confirm receipt of any transmitted information.

The rules identify two categories of employees when determining whether electronic distribution is appropriate:

Participants with work-related computer access as an integral part of their employment duties, and
Participants with no work-related computer access, but who affirmatively consent to receive documents electronically.

Note that the first group would not necessarily include employees who have access to a computer station or who've been given a company-issued email. Instead, these employees must be able to access electronic documents at a location where they usually work. Therefore, the employer needs to look at the nature of their employees’ duties and determine which category they fit into.

If employees fit into the second category, these workers must provide consent to their employer to send the documents electronically via personal email. However, the employer must provide a notice prior to, or as a part of that request for consent that includes the following:

an explanation that the documents will be available electronically
a notice that the employee's consent for electronic documents can be withdrawn without charge
the procedures for withdrawing consent and updating information
the right to request a paper copy and if a charge applies (note: no charge may be imposed for an SPD because it must be provided without charge)
description of the electronic delivery system and the software needed to use it

If an employee in the second category doesn't give consent, or withdraws consent, then the employer should mail a paper copy or distribute it through some other verifiable delivery method.

Regardless of what category your employees fall under, the recipient must be told of the significance of the document and of the right to request and obtain a paper version. In other words, the employer needs to tell them what it is and how to ask for a paper copy. They should not, under any circumstance, just post the SPD or notices to a company website without taking measures to ensure actual receipt.

Sarah Borders, CEBS

Principal, Benefits Compliance Solutions. Sarah has spent the last 15 years in the employee benefits industry, has numerous designations and serves on NAHU’s Employer Working Group Subcommittee and is an active board member of Austin AHU. She recently stepped down as Vice President of Benefits Compliance at one of the nation's largest brokerage firms to start her own compliance consulting practice. Her designations include an active license with the Texas Department of Insurance, CEBS (Certified Employee Benefits Specialist), Certified Health Care Reform Professional, HIPAA certification and Health Care Service Associate. She holds an MBA from Texas A&M Corpus Christi and a BA from University of Incarnate Word. Her consulting firm, Benefits Compliance Solutions, partners with employers to identify unknown risks and avoid hundreds of thousands of dollars in fines and lawsuits from failure to comply with their healthplan obligations.