Should electronic disclosure requirements for employee benefit plans be changed? The answer is yes. And no. And maybe so.

Earlier this month the Employee Benefits Security Administration leg of the Department of Labor solicited advice from industry professionals on changes they think should be made to this compliance issue.

In a statement, EBSA Assistant Secretary of Labor Phyllis C. Borzi said, “Some workers and retirees may not be sufficiently computer literate to receive information electronically or have reasonable access to the Internet, and others may simply prefer traditional paper disclosure.”

But she acknowledged that electronic disclosure of information could be just as effective as paper, and that distributing more plan information electronically could save employers and service providers money.  

Under ERISA requirements, plan information, such as summary plan descriptions, benefit statements and COBRA notifications, can be distributed electronically to employees who have Internet access at work and those who have signed a consent form accepting electronic information. Anything sent electronically also must be sent in a secure format in order to be HIPAA-compliant.

But as technology expands, it seems the DOL is wondering if it’s now time for an update in how or what content can be distributed electronically.

Commenting on the public forum, James McDonald said, “Whether the employees have access to a computer shouldn’t matter since these employees can call the 1-800 number and have the information they are requesting explained to them or mailed to them. This is no different than enrollments for 401(k) plans or health and welfare plans.” McDonald said that companies waste thousands of dollars sending out these disclosures that “end up in the trash when they could access online or call the HR contact center or third-party provider and have the information explained to them or sent by mail.”

Benefits consultant Linda Miller said she is in favor changing rules “to permit plan sponsors to provide a postcard or other non-electronic notice of the availability of [a summary plan description] notifying the individual of the availability of an electronic copy AND their right to receive a printed copy upon request.”

One issue has been whether enough employees have access to Internet to be able to receive more electronic notices.

Sharon Veronica Fox with Citizens National Bank in Athens, Ga., said, “While we are being thrown into the electronic age, the average employee has little access to computer expertise,” and says that employees should be given the option of choosing whether they receive any statements in electronic form.

Vanessa Johnson, president of VLJ Ventures, a human resources and legal consulting firm, said that while accessibility for some employees is an issue, “I think it is becoming less of an issue, especially considering the accessibility of most Web-based information via mobile devices and the increasing availability of free internet access in public locations, such as restaurants, retail establishments and public libraries.”

For employees that don’t readily have access to the Internet, companies have found ways to deal with it.

“Generally, employers offer employees the options either to have paper copies of the disclosures mailed to their homes or to request paper copies from benefits personnel at their work locations. Additionally, many benefits departments continue to maintain physical bulletin boards in common areas at work locations, due to other regulations that do not allow electronic disclosures,” Johnson said.  

Johnson said she would like to see regulations that further a full transition to electronic disclosures by eliminating requirements like affirmative consent to receive documents electronically, implementing “opt-out” instead of “opt-in” rules, relaxing the electronic delivery standard from the ‘integral part of the employee’s duties’ standard to a ‘reasonable access’ standard, and expanding the array of electronic media allowed to satisfy the disclosure requirements.

Gloria Gillespie with National Health Administrators Inc. in Woodstock, Ga., said on the public forum that companies are overburdened with disclosure notices. She suggests allowing more information to be disclosed at one time to avoid sending numerous notices.

She added, “[The] DOL needs to permit an easy, quick and effective way of keeping employees informed of their benefits rights. Written copies are not mailed out to retirees. Retirees and active employees alike are expected to go online for their answers.”

Karen McLeese, vice president of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Services, says the area needs to be reviewed as “the whole concept of electronic media is evolving.”

She believes that flexibility is the key to the issue. While more people are using and becoming comfortable using Internet, she says that it’s important that employees who might not have access to email or the Web are able to get the information they need.

“There should be options,” Karen said, such as getting the information in print form.

Have an idea? Comments will be accepted on the Department of Labor website through June 6.