Can employers email plan documents to employees?

It seems that everyone has a smartphone or a tablet, and I can’t think of anyone I know who does not have Internet access at home. Consequently, plan sponsors ask all the time if they can just email plan documents to employees to satisfy the notice requirements, or maybe just post new plan documents on the company intranet. 

Well, the recent decision in Thomas v. CIGNA (E.D.N.Y.) serves as a reminder that the short answer to that question is no.

Factually, the case involves a claim for benefits. A plan participant had life insurance through her employer’s ERISA plan. She ultimately became disabled and stopped working or paying premiums. 

When she passed away, her beneficiaries made a claim for life insurance benefits, which the insurer denied because, although the coverage allowed premium waivers for disability, the participant had not timely requested a premium waiver and thus was not covered when she died. Of course the beneficiaries sued, claiming that the premium waiver requirements had not been appropriately communicated to the participant due to inadequate summary plan description (SPD) distribution.  

Guess what? The court held that there was no evidence that the plan administrator had provided the participant with an SPD.

While the new SPD was available electronically, the company never sent notices out that the document was available. Plus, there was no evidence that new SPDs were furnished in any manner other than intranet posting.

There are actually rules that govern electronic disclosure of plan documents. If employees have work-related computer access, ERISA disclosures may be delivered electronically, or posted on the intranet, if the employees have the ability to effectively access documents furnished in electronic form at any location where the employee is reasonably expected to perform his duties, and are expected to have access to the employer’s electronic information as an integral part of those duties. 

It is not enough that they have access somewhere at work or have access at a common location (like a break room).  Accessing the computer has to be an actual requirement for their job function.

Documents can still be sent to employees and beneficiaries without work-related access to a computer as long as additional requirements are met. The employer or plan administrator must first obtain a consent form signed by the employee or beneficiary that specifically states the following:

The names or types of documents to which the consent applies

A sentence stating that consent can be withdrawn at any time without charge

An email address where the employee will be able to receive future announcements and/or documents if sent by email

The procedures for updating the email address used for receipt of electronically furnished documents

The procedures for withdrawing consent

The right to request and obtain a printed version of an electronically furnished document and, if there is a charge for the printed document, how much it will cost.

The computer hardware or software needed to access and download the electronically delivered documents.

If the plan administrator changes the hardware or software requirements, it must provide a new notice and obtain a new consent.

Without this consent, electronically providing documents is not sufficient. Hard copies have to be provided.

But don’t forget this case. Even if documents are provided electronically, notifications must be sent either in electronic or paper form to each employee or beneficiary at the time a document is provided electronically explaining the significance of the document and that the participant’s right to request a paper copy. 

You can’t just send an email and say “here it is.” Likewise, you can’t just post a document on the intranet and not alert everyone. And unless you have consents, you can’t say that you satisfied the delivery obligation to employees who don’t have regular access to a computer at work.

So if you want to distribute plan documents electronically you can. But you have to follow the rules. Don’t assume intranet posting is enough because it is not.

Source: Employee Benefit Adviser