“Company intranets are a common and convenient tool for benefit communications–but if ERISA’s electronic distribution rules are not followed, the plan administrator may not be able to rely on the posted materials in litigation. The takeaway from this case [Thomas v. CIGNA Group Ins.] is simple: Merely placing SPDs on a website, without notifying participants of their availability and significance (and the right to a paper copy), does not satisfy ERISA’s requirement that the distribution method be reasonably calculated to ensure actual receipt and result in full distribution.” March 26, 2015 EBIA Weekly
The failure to furnish an SPD under DOL guidelines could have other adverse consequences for an employer. For instance, a court might refuse to consider language in the SPD that would clarify an ambiguous plan provision in favor of the employer. And, in the event of benefits-related litigation, a court might even assess a penalty of up to $110 per day for failing to provide an SPD upon request.
For a full list of electronic disclosure requirements, see ERISAPros‘ FAQs – SPD Delivery Requirements. Employers wishing to deliver their SPDs–as well as Summary Annual Reports (SARs) and Summaries of Material Modifications (SMMs)–electronically should consider using ERISAPros’ proprietary Electronic Document Delivery Package (EDP). We provide a set of instructions, a checklist, fillable forms and emails, and a spreadsheet to monitor and document compliance.
