Group health plan disclosures have been governed by a rule written in 2002. The US Department of Labor wants to change that.
On July 23, the DOL published a proposed rule to create a new electronic disclosure safe harbor for Employee Retirement Income Security Act (ERISA)-covered group health plans. If finalized, employers and other plan administrators could post required plan documents online and send participants a notice of internet availability (NOIA), rather than mailing paper copies. The DOL's Employee Benefits Security Administration is accepting public comment on the proposal through September 21.
The case for updating the rules has built for years. The 2002 Safe Harbor - the rule still in place - allows electronic delivery only to employees with regular computer access as part of their job. Everyone else requires affirmative opt-in consent or paper delivery by default.
A Republican-led House group led by Rep. Tim Walberg wrote to the DOL urging it to establish a default electronic delivery safe harbor for health and welfare plan disclosures. The letter described ERISA health plan communications as operating under a largely outdated system of physical paper and hand delivery. The July proposed rule is a direct response to that pressure.
The new safe harbor would apply to group health plans providing medical, dental, vision, and related health benefits. It would not cover other ERISA welfare benefits, such as disability, life insurance, or prepaid legal plans. The DOL invited comments on whether to extend the scope to those benefits.
To use the safe harbor, plan administrators must collect and maintain a valid electronic address from each participant - an email address or smartphone number for text messages. Before switching to electronic delivery, they send each individual an initial paper notice explaining the change and the right to opt out. Each time a required document becomes available after that, the plan sends an NOIA to the participant's electronic address directing them to the document online.
Those documents must be posted to a website or other electronic repository by the date they would otherwise have to be furnished. They must remain available for at least one year or until superseded by a new version. They must also be searchable, printable, and capable of being saved in electronic form. The DOL's proposal does not alter any separate record-retention obligations that apply under ERISA or other laws.
One gap has drawn attention from benefits attorneys: unlike the framework the DOL adopted for retirement plans in 2020, this proposal does not permit email delivery of documents themselves. Employers can send an NOIA by email, but participants must access the document through a separate website or portal. That additional step is not required under the retirement plan framework, and the DOL has not explained the difference.
For benefits brokers advising employer clients on plan operations, reviewing how recent ERISA liability rulings are reshaping plan administrator obligations provides useful context for the compliance conversation this proposed rule will prompt.
Employers must honor opt-out requests and provide free paper copies on request, with no cap. The 2020 Retirement Safe Harbor limits free paper copies. The proposed health plan rule does not. Participants who opt out revert to paper for all subsequent documents.
The rule addresses what happens when an employer-assigned email address becomes unavailable. If a terminated employee remains a plan participant through COBRA continuation coverage, the employer must keep the address active or obtain a replacement. Failure to do either reverts the individual to paper delivery.
That coordination point touches the TPA relationship directly. Under the proposed rule, a TPA, insurer, or other service provider may maintain the document website on behalf of the plan sponsor. Brokers should confirm which party in the service chain owns document posting and NOIA distribution, and that written service agreements reflect those responsibilities.
Data security and HIPAA controls for any participant portal housing plan documents are an additional consideration, particularly where the portal stores health plan enrollment and coverage data - a risk the recent Paylogix TPA data breach, which exposed tens of thousands of plan participants' health and financial data, made concrete.
One unresolved question affects employers who use wrap summary plan descriptions. Many use a single wrap document covering both group health plan and non-health welfare benefits. The DOL has not clarified whether the new safe harbor would cover the entire wrap document or only the group health plan portions. Employers whose wrap SPD covers disability, life insurance, or other non-health benefits may need to maintain two separate delivery methods until the DOL resolves that issue in a final rule.
The proposed rule is not final, and no finalization date has been set. Benefits brokers advising employer clients have good reason to use the September 21, comment deadline as a prompt for a compliance conversation. That conversation should cover which plan documents would fall under the new safe harbor; how the employer collects and stores participant electronic addresses; what happens to that data when an employee terminates; and how coordination between the plan sponsor, TPA, and COBRA administrator would work in practice.
Brokers who help clients work through those questions before a final rule lands will be better placed to guide implementation when the time comes. The broader fiduciary obligations that define the broker's advisory role make that kind of proactive engagement the right standard.
