The Department of Labor (DOL) announced it is reviewing the use of electronic media by employee benefit plans subject to ERISA to furnish information to participants and beneficiaries, following and in response to Executive Order 13563 issued by President Obama to address and improve current regulations. If you have concerns about the current process, now is a good time to voice those concerns to the Department.

Current DOL rules, issued in 2002, provide standards for the electronic distribution of plan disclosures required under ERISA. There generally are two categories of participants to whom electronic disclosures of plan information under DOL authority could be made:

  1. those who can effectively access documents furnished in electronic form at any location where the participant is reasonably expected to perform his or her duties as an employee and with respect to whom access to the employer’s or plan sponsor’s electronic information system is an integral part of those duties; and
  2. those who affirmatively consent.

So, for example, a nationwide retailer who has hundreds of employees at the store level and for whom computer access is not an integral part of their duties, electronic disclosure of plan information is not available, absent affirmative consent which is in most cases not practical. The DOL opined some years ago that kiosks made available to employees for this purpose would not be sufficient to satisfy the “furnish” requirement.

Thus, the Department’s earlier guidance, while helpful, made it difficult for some employers to utilize technology for certain groups of employees. That guidance also does not reflect some of the more recent advancements in technology that may facilitate the furnishing of plan information. In fact, a stated purpose of the DOL’s current review:

is to explore whether, and possibly how, to expand or modify these standards taking into account current technology, best practices and the need to protect the rights and interests of participants and beneficiaries

The DOL is specifically looking for comments (due no later than June 6) on how to make these rules better. Its announcement sets forth 30 specific questions on a broad range of topics related to electronic distribution of benefit plan information. Examples include:

  • What are the most significant impediments to increasing the use of electronic media (e.g., regulatory impediments, lack of interest by participants, lack of interest by plan sponsors, access issues, technological illiteracy, privacy concerns, etc.)? What steps can be taken by employers, and others, to overcome these impediments?
  • Are there any new or evolving technologies that might impact electronic disclosure in the foreseeable future?
  • Who, as between plan sponsors and participants, should decide whether disclosures are furnished electronically? For example, should participants have to opt into or out of electronic disclosures?
  • If a plan furnishes disclosures through electronic media, under what circumstances should participants and beneficiaries have a right to opt out and receive only paper disclosures?

The Department hopes to hear from plan participants and beneficiaries, employers and other plan sponsors, plan administrators, plan service providers, health insurance issuers, members of the financial community, and the general public. Plan sponsors (and service providers who assist them with plan administration) will be paying close attention to future guidance which could provide significant cost savings relating to the manner in which plan communications may be made going forward.