Signed, Sealed, e-Delivered: The DOL Proposes “Notice-and-Access” Electronic Disclosure Safe Harbor for Group Health Plans

The U.S. Department of Labor’s (DOL) Employee Benefits Security Administration recently published a proposed rule that would create a new, optional safe harbor permitting group health plan administrators to furnish certain ERISA-required disclosures electronically through a “notice-and-access” framework similar to what has been available to pension plans since 2020 (see our client alert regarding the 2020 change applicable to pension plans here).

Under the proposed safe harbor, an administrator could post covered documents to a website or other electronic location and send covered individuals a brief electronic Notice of Internet Availability (NOIA), rather than mailing paper copies or satisfying the “wired at work” or affirmative-consent requirements of the 2002 safe harbor described below.

Background

ERISA requires plan administrators to furnish required disclosures using methods reasonably calculated to ensure receipt by participants. Since 2002, electronic delivery by group health plans has been governed by a safe harbor that permits electronic delivery to individuals who are “wired at work,” i.e., electronic access is integral to their job duties (e.g., an office employee who works at a computer all day using the company’s systems) or participants who consent to receive documents electronically. If this safe harbor is not met, plan administrators generally must rely on paper delivery or another method reasonably calculated to ensure actual receipt. This framework can be inefficient since it often requires individualized determinations regarding eligibility for electronic delivery and results in substantial printing and mailing costs.

In 2020, the DOL issued a “notice-and-access” safe harbor under which pension plan administrators can post documents to a website, send participants a NOIA, and inform participants of their rights to request paper copies or opt out of electronic delivery completely. Pension plan administrators may also use email to send disclosures to participants directly. The DOL is now proposing to extend a substantially similar rule to group health plans.

Key Features of the Proposed Safe Harbor

The proposed safe harbor is optional for group health plan administrators and would be implemented in addition to the 2002 safe harbor and paper delivery options. Key features of this method include the following:

• Electronic delivery without affirmative consent. Administrators could use the notice-and-access method for a participant, beneficiary, or other covered individual who has provided an electronic address or has been assigned an electronic address by an employer, without obtaining the affirmative consent generally required under the 2002 safe harbor. A dependent child who is a beneficiary under the plan, has attained age 18, and has provided an electronic address also would qualify as a covered individual.
• Broad scope of covered documents. The proposed safe harbor generally would apply to documents or information that a plan administrator is required to furnish to participants and beneficiaries under Title I of ERISA, including summary plan descriptions, summaries of material modifications, and summary annual reports, as well as documents required to be furnished upon request (which, by contrast, are excluded from the pension plan safe harbor).
• Not available to welfare plans other than group health plans. The safe harbor would be available only to group health plans and would not extend to other welfare benefit plans, such as life or disability plans.
• Service provider reliance. Insurance issuers that have contractually agreed to furnish disclosures may rely on the proposed safe harbor, and website functions may be delegated to issuers or third-party administrators, subject to the plan administrator’s continuing fiduciary duties to prudently select and monitor those service providers.
• Notice-and-access rather than direct email delivery. Covered documents would be posted to a website or other electronic location, such as a mobile application, to which covered individuals have reasonable access. Unlike the pension plan safe harbor, the proposed group health plan safe harbor would not permit direct email delivery of covered documents due to the potentially sensitive nature of group health plan information and security concerns associated with email.
• Combined annual notices. Administrators could furnish a single combined annual NOIA for multiple covered documents, and covered documents that must be furnished with annual enrollment materials could be identified in a combined NOIA provided at the time of annual enrollment.
• Participant protections. Covered individuals could request paper copies free of charge and opt out of electronic delivery altogether. Unlike the pension plan rule, which guarantees one free paper copy, the proposal would not limit the number of free paper copies that may be requested. Electronic delivery systems also would be required to identify invalid or inoperable electronic addresses. If a NOIA is returned as undeliverable and the problem cannot promptly be cured, the affected individual would be treated as having opted out of electronic delivery and would receive paper copies. Before first relying on the safe harbor, administrators generally would be required to furnish an initial paper notice, although that notice could be furnished electronically to individuals already receiving electronic disclosures under the 2002 safe harbor.
• Certain claims notices included. The proposal would also amend the DOL’s claims-procedure regulation to permit notices of adverse benefit determinations and benefit determinations on review to be furnished electronically in accordance with the new safe harbor.
• Applicability. The safe harbor would be available beginning on the first day of the first calendar year after publication of the final rule.

Key Takeaways and Next Steps

• Email address management will be important. Plan administrators considering use of the safe harbor should review existing processes for collecting and maintaining email addresses, including procedures for maintaining valid addresses following a participant’s termination of employment.
• No direct email delivery under the proposed safe harbor. Unlike the pension plan safe harbor, the proposed group health plan safe harbor would not permit plan administrators to satisfy the safe harbor by sending covered documents directly by email. Email generally would instead be used to furnish the NOIA and, in certain circumstances, the initial notice.
• HIPAA obligations are unaffected. The proposed safe harbor would not affect HIPAA privacy and security requirements, which will continue to apply to electronic posting arrangements. Plan administrators should involve privacy and security personnel early in any implementation planning.
• Monitor and plan for the new rule. The new safe harbor will become available on the first day of the first calendar year following publication of a final rule. Accordingly, if a final rule is published during 2026, the safe harbor could become available as early as January 1, 2027. Given this timing, plan administrators interested in this new safe harbor should begin planning for implementation before the final rule is published.