[Federal Register: April 7, 2011 (Volume 76, Number 67)]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Part 2520
Request for Information Regarding Electronic Disclosure by
Employee Benefit Plans
AGENCY: Employee Benefits Security Administration, Department of Labor.
ACTION: Request for information.
SUMMARY: The Department of Labor is reviewing the use of electronic
media by employee benefit plans to furnish information to participants
and beneficiaries covered by employee benefit plans subject to the
Employee Retirement Income Security Act (ERISA). In 2002, the
Department adopted standards for the electronic distribution of plan
disclosures required under ERISA. The purpose of the 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.
This request for information (RFI) solicits views, suggestions, and
comments from plan participants and beneficiaries, employers and other
plan sponsors, plan administrators, plan service providers, health
insurance issuers, and members of the financial community, as well as
the general public, on this important issue.
DATES: Comments must be submitted on or before June 6, 2011.
ADDRESSES: You may submit written comments to any of the addresses
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
E-mail: e-ORI@dol.gov. Include RIN 1210-AB50 in the
subject line of the message.
Mail: Office of Regulations and Interpretations, Employee
Benefits Security Administration, Room N-5655, U.S. Department of
Labor, 200 Constitution Avenue, NW., Washington, DC 20210, Attention:
All submissions received must include the agency name and Regulation
Identifier Number (RIN) for this rulemaking. Comments received will be
posted without change to http://www.regulations.gov and http://
www.dol.gov/ebsa, and made available for public inspection at the
Public Disclosure Room, N-1513, Employee Benefits Security
Administration, 200 Constitution Avenue, NW., Washington, DC 20210,
including any personal information provided. Do not include any
personally identifiable information (such as name, address, or other
contact information) or confidential business information that you do
not want publicly disclosed. Comments posted on the Internet can be
retrieved by most Internet search engines. Comments may be submitted
anonymously. Persons submitting comments electronically are encouraged
not to submit paper copies. All comments will be made available to the
FOR FURTHER INFORMATION CONTACT: Thomas M. Hindmarch, Office of
Regulations and Interpretations, Employee Benefits Security
Administration, (202) 693-8500. This is not a toll-free number.
On July 19, 1977, the Department of Labor (Department) adopted
general standards governing the delivery of all information required to
be furnished to participants, beneficiaries, and other specified
individuals under title I of ERISA.\1\ See 29 CFR 2520.104b-1. These
standards require that plan administrators use delivery methods
reasonably calculated to ensure actual receipt of such information by
plan participants, beneficiaries and other specified individuals. See
Sec. 2520.104b-1(b)(1). For example, in-hand delivery to an employee
at his or her worksite is acceptable, as is material sent by first-
class mail. On April 9, 2002, the Department amended Sec. 2520.104b-1
to establish a ``safe harbor'' for the use of electronic media to
satisfy the general furnishing requirement in Sec. 2520.104b-1(b). See
Sec. 2520.104b-1(c).\2\ The specific requirements of the safe harbor
are discussed below.
\1\ 42 FR 37186.
\2\ 67 FR 17264.
On January 18, 2011 the President issued Executive Order 13563,
``Improving Regulation and Regulatory Review.'' Executive Order 13563
reaffirms the importance of achieving regulatory goals through the most
innovative and least burdensome tools available. It also emphasizes the
importance of public participation in the regulatory process (in
section 2) and retrospective consideration of existing regulatory
policies (in section 6).
In light of these goals, and in consideration of Administration-
wide policies encouraging electronic dissemination of information to
the public by federal government agencies consistent with the
principles of transparency, participation, and collaboration, EBSA is
issuing this RFI to facilitate consideration of its approach to
electronic disclosure by employee benefit plans. The Department is
aware that electronic disclosure can be as effective as paper based
communications, and that it can lower costs and administrative burdens
and increase timeliness and accuracy for all involved. The Department
also is aware that some of America's workers may not have reasonable
access to the Internet, and others may prefer traditional (paper)
disclosure methods for important financial interactions regarding their
pensions and other employee benefits.
The Department recognizes that there have been substantial changes
in technology since over time, both in the workplace and at home,
including: The expansion of broadband through cable, fiber optic and
wireless networks; hardware improvements to servers and personal
computers improving storage, memory, recovery, and computing power;
introduction of smart phones, net books and other personal computing
devices; and social networking (e.g., LinkedIn, Facebook, and Twitter).
At least some evidence suggests that these changes have resulted in
a substantial increase in access to and utilization of electronic
media. For instance, the 2009 U.S. Census Bureau Current Population
Survey (Census) found that 76.7% of the households in the United States
have access to the Internet from some location.\3\ The Census data
further shows that of the 139.1 million private sector workers
approximately 111.7 million have access to the Internet from some
location. Of the remaining 27.4 million workers who do not have
personal access, approximately 10.6 million reside in a household where
someone else has Internet access.
\3\ The Census information may be found at http://
Over the past few years, the Department has engaged in various
rulemakings and other initiatives involving disclosures to participants
and beneficiaries. Examples include the qualified default investment
alternative regulation (29 CFR 2550.404c-5), the participant-level fee
disclosure regulation (29 CFR 2550.404a-5, 75 FR 64910), the pension
benefit statement initiative (FAB 2006-03), the annual funding notice
regulation (29 CFR 2520.101-4; FAB 2009-01; proposed Sec. 2520.101-5,
75 FR 70625), and the target date fund initiative (75 FR 73987).
Increasingly, commenters on these initiatives request that the
Department take recognition of changes in technology, as other federal
regulatory agencies have, and revisit, update, and modernize the
electronic disclosure safe harbor to promote electronic disclosure of
employee benefit plan information to the greatest extent possible. They
argue that such forms of disclosure would be more efficient, less
burdensome, and less costly than paper for plans and, therefore,
participants. Not everyone, however, agrees that electronic disclosure
is appropriate for all participants and beneficiaries or for all
disclosures. Some caution against broadening the electronic disclosure
safe harbor, arguing that some workers do not have reasonable Internet
access, or that they simply prefer paper over electronically disclosed
materials even when they have access.
In light of these differing views and the significance of the
issues surrounding the use of electronic disclosure, the Department has
decided to explore whether and how to expand or modify the current
standards under ERISA applicable to the electronic distribution of
required plan disclosures. To that end, the Department, through this
RFI, is soliciting the views of the public on this important issue. Set
forth below are a list of questions.
In considering the questions set forth in this RFI, commenters are
encouraged to take into account the following information:
Electronic Disclosure Under ERISA
As noted above, on April 9, 2002, the Department established its
electronic disclosure safe harbor. See Sec. 2520.104b-1(c). As a safe
harbor, Sec. 2520.104b-1(c) is not the exclusive means for using
electronic media to satisfy the requirements of Sec. 2520.104b-
1(b)(1). Plan administrators may find that other procedures will allow
them to meet the general delivery requirements of Sec. 2520.104b-1.
However, following the conditions of the safe harbor provides assurance
that the general delivery requirements under Sec. 2520.104b-1(b)(1)
have been satisfied.
The safe harbor is available only if: (1) The plan administrator
takes appropriate and necessary measures reasonably calculated to
ensure that the system for furnishing documents results in actual
receipt of transmitted information and protects the confidentiality of
personal information relating to the individual's accounts and
benefits; (2) the electronically delivered documents are prepared and
furnished in a manner that is consistent with the style, format and
content requirements applicable to the particular document; (3) notice
is provided to each participant, beneficiary or other individual, in
electronic or non-electronic form, at the time a document is furnished
electronically, that apprises the individual of the significance of the
document when it is not otherwise reasonably evident as transmitted and
of the right to request and obtain a paper version of such document;
and (4) upon request, the participant, beneficiary or other individual
is furnished a paper version of the electronically furnished documents.
Sec. 2520.104b-1(c)(1)(i) through (iv).
The safe harbor applies only for two categories of individual
recipients. The first category consists of participants who have the
ability to 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. See Sec. 2520.104b-1(c)(2)(i). The
second category consists of participants, beneficiaries and other
persons who are entitled to documents under title I of ERISA, but who
do not fit into the first category. For this category, the safe harbor
assumes the utilization of electronic information systems beyond the
control of the plan or plan sponsor. The current safe harbor,
therefore, provides that the second category of individuals must
affirmatively consent to receive documents electronically. See Sec.
2520.104b-1(c)(2)(ii)(A). The safe harbor relief is not available with
respect to these individuals in the absence of such consent.
In general, the affirmative consent condition requires plans to
ensure that an individual has affirmatively consented, in electronic or
non-electronic form, to receiving documents through electronic media
and has not withdrawn such consent. Alternatively, in the case of
documents to be furnished through the Internet or through other
electronic communication networks, the individual must have
affirmatively consented or confirmed consent electronically, in a
manner that reasonably demonstrates the individual's ability to access
information in the electronic form that will be used to provide the
information that is the subject of the consent, and must have provided
an address for the receipt of electronically furnished documents. In
addition, prior to consenting, the individual must be provided, in
electronic or non-electronic form, a clear and conspicuous statement
indicating: (1) The types of documents to which the consent would
apply; (2) that consent can be withdrawn at any time without charge;
(3) the procedures for withdrawing consent and for updating the
participant's, beneficiary's or other individual's address for receipt
of electronically furnished documents or other information; (4) the
right to request and obtain a paper version of an electronically
furnished document, including whether the paper version will be
provided free of charge; and (5) any hardware and software requirements
for accessing and retaining the documents. Further, following consent,
if a change in such hardware or software requirements creates a
material risk that the individual will be unable to access or retain
electronically furnished documents, the individual: (1) Is provided
with a statement of the revised hardware or software requirements for
access to and retention of electronically furnished documents; (2) is
given the right to withdraw consent without charge and without the
imposition of any condition or consequence that was not disclosed at
the time of the initial consent; and (3) again consents in accordance
with the requirements above. See Sec. 2520.104b-1(c)(2)(ii).
Electronic Disclosure Under the Internal Revenue Code
The Department of Treasury and the Internal Revenue Service (IRS)
have issued guidance relating to the use of electronic media of notices
or elections with respect to a retirement plan. In 2000, final
regulations were issued relating to the use of electronic media for the
delivery of certain participant notices and consents that are required
to be provided in connection with distributions from retirement plans.
In 2003, the Department of Treasury and IRS published final
regulations under section 4980F under the Internal Revenue Code (Code)
that also apply for purposes of section 204(h) of ERISA (2003 section
4980F regulations).\4\ Under Q&A-13(c) of Sec. 54.4980F-1, notice
required under section 4980F of the Code or section 204(h) of ERISA
(section 204(h) notice) may be provided electronically if certain
requirements are satisfied. The section 204(h) notice must actually be
received by the applicable individual or the plan administrator must
take appropriate and necessary measures reasonably calculated to ensure
that the method for providing the section 204(h) notice results in
actual receipt of the notice. In addition, the
plan administrator must provide the applicable individual with a clear
and conspicuous statement that the individual has a right to receive a
paper version of the section 204(h) notice without the imposition of
fees and, if the individual requests a paper copy of the section 204(h)
notice, the paper copy must be provided without charge. The 2003
section 4980F regulations also provide a safe harbor method at 26 CFR
54.4980F-1, Q&A-13(c)(3), for delivering a section 204(h) notice
electronically, which is substantially the same as the consumer consent
rules of E-SIGN (described below under the heading ``Electronic
Signatures in Global and National Commerce Act'').\5\
\4\ 68 FR 17277.
\5\ The 2003 section 4980F regulations were issued under
amendments to the Code and ERISA contained in the Economic Growth
and Tax Relief Reconciliation Act of 2001 (EGTRRA), which was
enacted after enactment of ESIGN. The EGTRRA amendments, at section
4980F(g) of the Code and section 204(h)(7) of ERISA, authorize
regulations allowing section 204(h) notice to be provided using new
On October 20, 2006, the Department of Treasury and IRS published
final regulations under the Code setting forth standards for electronic
systems that make use of an electronic medium to provide a notice to a
recipient, or to make a participant election or consent, generally with
respect to a retirement plan, an employee benefit arrangement, or an
individual retirement plan.\6\ These regulations provide two methods by
which such plans or arrangements are permitted to provide an applicable
notice \7\ to a recipient through the use of an electronic medium.
Under the first method, an applicable notice is permitted to be
provided electronically after the recipient consents to the electronic
delivery of the notice (consumer consent method). The consumer consent
method reflects the consumer consent requirements in E-SIGN. The second
method does not require consent by the recipient, but when the
applicable notice is provided, the recipient must be advised that he or
she may request and receive the applicable notice in writing at no
charge (alternative method). In addition, any recipient of the notice
must be ``effectively able'' to access the electronic medium used to
provide the notice. See generally 26 CFR 1.401(a)-21(b) and (c). These
regulations also modified the 2003 section 4980F regulations to require
that a section 204(h) notice comply with the regulations under Sec.
1.401(a)-21. The current section 4980F regulations retain the
requirement in the 2003 section 4980F regulations that the section
204(h) notice actually be received by the applicable individual or that
the plan administrator take appropriate and necessary measures
reasonably calculated to ensure that the method for providing the
section 204(h) notice results in actual receipt. See 26 CFR 54.4980F-1,
\6\ 71 FR 61877.
\7\ Section 1.401(a)-21(e) defines an applicable notice as any
notice, report, statement, or other document required to be provided
to a recipient under a retirement plan, employee benefit
arrangement, or individual retirement plan. Section 1.401(a)-
21(a)(3) provides that Sec. 1.401(a)-21 does not apply to any
notice, election, consent, disclosure, or other obligation over
which the Department of Labor or the Pension Benefit Guaranty
Corporation (PBGC) has interpretive authority under Title I or IV of
ERISA or to any provision of the Internal Revenue Code over which
the Labor Department or PBGC has interpretive authority.
Electronic Disclosure of Proxy Materials and Prospectuses Under
In 2007, the Securities and Exchange Commission (SEC) amended its
rules under the Securities Exchange Act of 1934 to provide a method to
furnish proxy materials by posting them on an Internet Web site and
providing shareholders with notice of the availability of the proxy
materials.\8\ In 2009, the SEC adopted amendments permitting a person
to satisfy its mutual fund prospectus delivery obligations under the
Securities Act of 1933 by sending or giving investors a summary
prospectus and providing the statutory prospectus on an Internet Web
site.\9\ Under both rules, copies of the documents must be sent at no
charge to shareholders requesting such copies. See 17 CFR 240.14a-16;
17 CFR 230.498. The SEC has also previously provided interpretive
guidance on the use of electronic media to deliver information under
the federal securities law.\10\
\8\ 72 FR 4148 and 72 FR 42221.
\9\ 74 FR 4546.
\10\ 60 FR 53458, 61 FR 24644, 65 FR 25843, and 73 FR 45862.
2006 ERISA Advisory Council Working Group Report on Prudent Investment
On August 9, 2006, and September 21, 2006, a working group of the
ERISA Advisory Council held a hearing on numerous issues pertaining to
the management of plan assets, including the use of electronic media
for disclosures required by regulations under section 404(c) of ERISA.
Thirteen witnesses testified at this hearing. In response to this
hearing, the working group issued the ``Report of the Working Group on
Prudent Investment Process.'' With respect to the Department's
electronic disclosure safe harbor as applied to defined contribution
pension plans, the Report states:
The Working Group would like to recommend to the Department of
Labor that the Department should reconsider its rules for electronic
transfer of notices and the delivery of `sufficient information.'
The Working Group heard extensive testimony regarding the growth of
the internet and its use by plan participants. Access to and use of
the internet has grown significantly since the DOL first considered
electronic delivery. The Working Group recommends that the
electronic delivery standard should be relaxed from the `integral
part of the employee's duties' standard currently employed to a
`reasonable access' standard.
This Report can be accessed at http://www.dol.gov/ebsa/publications/
2007 ERISA Advisory Council Working Group Report on Participant Benefit
On July 12, 2007 and September 18, 2007, a working group of the
ERISA Advisory Council held a public hearing on the pension benefit
statement requirements under section 105 of ERISA, as amended by
section 508 of the Pension Protection Act of 2006, Public Law 109-280,
120 Stat. 949-952. Thirteen witnesses testified at this hearing. In
response to this hearing, the working group issued the ``Report of the
Working Group on Participant Benefit Statements.'' In this Report, the
Working Group recommended that ``the Department of Labor should update
its regulations regarding electronic communication to a `reasonable
access' standard as in the Department of Treasury safe harbor
regulation in recognition of the continued advancement in Web-based
communication and the increase in its use by participants.'' In support
of this recommendation, the Report explains:
Following an animated discussion, the Working Group came to a
consensus that although the American workforce is becoming more
computer literate, it is not yet appropriate to make electronic
delivery of participant statements the norm. In addition to access
and ability to use issues, many participants who are computer
literate are better served with paper when managing their plan
asset. However, the Treasury rules regarding communication provide
incentive for plan sponsors to migrate to electronic delivery. In
any event, the new regulations should reexamine the use of
electronic communication for benefit statements to recognize the
changes in technology and the participant group's use of it.
This Report can be accessed at http://www.dol.gov/ebsa/publications/AC-
2009 ERISA Advisory Council Report on Promoting Retirement Literacy and
Security by Streamlining Disclosures
On July 23, 2009 and September 15, 2009, the ERISA Advisory
Council, in furtherance of its focus on the issue of promoting
retirement literacy and security by streamlining disclosures to
participants and beneficiaries, held a public hearing to study the
efficacy of ERISA's reporting and disclosure schemes, as well as
problems and costs related to such disclosures. Approximately 18
witnesses testified at this hearing. Upon conclusion of the hearing,
the full ERISA Advisory Council reached consensus and issued a report
entitled ``Promoting Retirement Literacy and Security by Streamlining
Disclosures.'' In this Report, the Council recommended that:
[T]he Department of Labor permits plan administrators to rely on
the IRS Regulations in order to comply with ERISA's disclosure
requirements. The Council believes that the IRS Regulations will
adequately protect the rights of those participants who are actively
employed because it will generally be very simple for administrators
to determine whether active employees have reasonable access to the
electronic medium used to furnish the disclosure. The Council
believes that administrators will not furnish those individuals who
are not working actively--such as retirees or beneficiaries--with
electronic disclosure unless the administrator has a working
electronic mail address for such individuals. In that way,
participants who are not actively employed and plan beneficiaries
will be protected.
In support of this recommendation, the Report explains:
Electronic communications have enormously improved the
retirement system for both plans covered by ERISA and their
participants. They have improved participant education, retirement
planning, and plan participation. Electronic communications have
allowed plans to furnish more information to participants and
beneficiaries for less cost. They have simplified plan
administration and improved plan recordkeeping. All of these
benefits of electronic communication have improved retirement
security, which was and remains an underlying goal of ERISA. The
Council believes that this goal of retirement security would be
better served if the DOL would expand the array of electronic media
that plan administrators may use to satisfy ERISA's disclosure
The Report can be reviewed at http://www.dol.gov/ebsa/publications/
Electronic Signatures in Global and National Commerce Act
The Electronic Signatures in Global and National Commerce Act (E-
SIGN), 17 U.S.C. 7001-7021, generally provides that electronic records
and signatures have the same legal effect as their paper
counterparts.\11\ When a statute, regulation, or other rule of law
requires that information relating to a transaction be provided or made
available to a consumer \12\ in writing, section 101(c) of E-SIGN
requires that the consumer must first affirmatively consent to receive
the information electronically in a manner that reasonably demonstrates
the consumer's ability to access the information in electronic form. 17
U.S.C. 7001(c). However, section 104(d)(1) of E-SIGN, 17 U.S.C.
7004(d)(1), authorizes a Federal regulatory agency to exempt, without
condition, a specified category or type of record from the consumer
consent requirements in section 101(c). The agency may issue an
exemption only if it is necessary to eliminate a substantial burden on
electronic commerce and will not increase the material risk of harm to
\11\ The rules of section 101 of E-SIGN do not apply to certain
consumer notices. These include consumer notices that are necessary
for the protection of a consumer's health, safety, or shelter (e.g.,
cancellation of health benefits or life insurance and foreclosure on
a credit agreement secured by an individual's primary residence).
See section 103(b)(2)(B) and (C) of E-SIGN.
\12\ Section 106(1) of E-SIGN generally defines a consumer as an
individual who obtains products or services used primarily for
personal, family, or household purposes.
B. Request for Information
The purpose of this RFI is to solicit views, suggestions and
comments from plan participants and beneficiaries, employers and other
plan sponsors, plan administrators, plan service providers, health
insurance issuers, and members of the financial community, as well as
the general public on whether, and possibly how, to expand or modify
the Department's current electronic disclosure safe harbor. To
facilitate consideration of the issues, the Department has set forth
below a number of questions. Respondents need not answer every
question, but should identify, by its number, each question addressed.
Interested persons are also encouraged to address any other matters
they believe germane to the general topic of the RFI.
Access and Usage Questions
1. What percentage of people in this country has access to the
Internet at work or home? Of this percentage, what percentage has
access at work versus at home? Does access vary by demographic groups
(e.g., age, socioeconomic, race, national origin, etc.)?
2. What percentage of participants and beneficiaries covered by an
ERISA plan has access to the Internet at work or home? Of this
percentage, what percentage has access at work, at home, or both? Does
access vary by demographic groups (e.g., age, socioeconomic, race,
national origin, etc.)? What percentage of participants and
beneficiaries uses the Internet to access private information such as
personal bank accounts?
3. What percentage of pension benefit plans covered by ERISA
currently furnish some or all disclosures required by ERISA
electronically to some or all participants and beneficiaries covered
under these plans? Please be specific regarding types of plans (e.g.,
single-employer plans versus multiemployer plans, defined benefit
pension plans versus defined contribution pension plans, etc.), types
of participants and beneficiaries (e.g., active, retired, deferred
vested participants) and types of disclosures (e.g., all required title
I disclosures versus select disclosures).
4. What percentage of employee welfare benefit plans covered by
ERISA currently furnish some or all disclosures required by ERISA
electronically to some or all participants and beneficiaries covered
under these plans? Please be specific regarding types of welfare plans
(e.g., health, disability, etc.), types of participants and
beneficiaries (e.g., active employees, retirees, COBRA Qualified
Beneficiaries, etc.) and types of disclosures (e.g., all required title
I disclosures versus select disclosures).
5. What are the most common methods of furnishing information
electronically (e.g., e-mail with attachments, continuous access Web
6. 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?
7. Is there evidence to suggest that any increase in participant
and beneficiary access to, and usage of, the Internet and similar
electronic media in general equates to an increased desire or
willingness on the part of those participants and beneficiaries to
receive employee benefit plan information electronically? If so, what
8. Are there any new or evolving technologies that might impact
electronic disclosure in the foreseeable future?
9. Should the Department's current electronic disclosure safe
harbor be revised? If so, why? If not, why not?
10. If the safe harbor should be revised, how should it be revised?
Please be specific.
11. Should a revised safe harbor have different rules or conditions
for different types of employee benefit plans (e.g., pension versus
welfare plans)? If so, why and what differences?
12. Should a revised safe harbor have different rules or conditions
for different types of disclosures (e.g., annual funding notice,
quarterly benefit statement, COBRA election notice, etc.)? If so, why
and what differences?
13. Should a revised safe harbor have different rules or conditions
for different recipients entitled to disclosures (active employees,
retirees, COBRA Qualified Beneficiaries, etc.)? If yes, why, and how
should the rules or conditions differ?
14. To what extent should the Department encourage or require
pension and welfare benefit plans to furnish some or all disclosures
required under title I of ERISA through a continuous access Web
site(s)? In responding to this question, please address whether and how
frequently participants and beneficiaries should be notified of their
ability to access benefit information at the Web site(s) and the most
appropriate means to provide such notice. For example, should
participants and beneficiaries receive a monthly notification of their
ability to access benefit information or should they receive a
notification only when an ERISA-required disclosure is added to the Web
site? How should such notifications be furnished (e.g., paper, e-mail,
etc.)? Please also address what steps would be needed to ensure that
participants and beneficiaries understand how to request and receive
paper copies of the disclosures provided on the Web site(s).
15. 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? See
16. Should a revised safe harbor contain conditions to ensure that
individuals with disabilities are able to access disclosures made
through electronic media, such as via continuous access Web sites? If
so, please describe the conditions that would be needed. Also, please
identify whether such conditions would impose any undue burdens on
employee benefit plans, including the costs associated with meeting any
such conditions. What burden and difficulty would be placed on
employees with disabilities if the Web sites and/or other electronic
communication were not accessible?
17. 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?
18. The Department's current regulation has provisions pertaining
to hardware and software requirements for accessing and retaining
electronically furnished information. In light of changes in
technology, are these provisions adequate to ensure that participants
and beneficiaries, especially former employees with rights to benefits
under the plan, have compatible hardware and software for receiving the
documents distributed to their non-work e-mail accounts?
19. Some have indicated that the affirmative consent requirement in
the Department's current electronic disclosure safe harbor is an
impediment to plans that otherwise would elect to use electronic media.
How specifically is this requirement an impediment? Should this
requirement be eliminated? Is the affirmative consent requirement a
substantial burden on electronic commerce? If yes, how? Would
eliminating the requirement increase a material risk of harm to
participants and beneficiaries? If yes, how? See section 104(d)(1) of
20. In general, the E-SIGN Act permits electronic disclosure of
health plan materials but does not apply to cancellation or termination
of health insurance or benefits electronically. Are there special
considerations the Department should take into account for group health
plan disclosures (including termination of coverage and privacy
21. Many group health plan disclosures are time-sensitive (e.g.,
COBRA election notice, HIPAA certificate of creditable coverage,
special enrollment notice for dependents previously denied coverage
under the ACA, denials in the case of urgent care claims and appeals).
Are there special considerations the Department should take into
account to ensure actual receipt of time-sensitive group health plan
22. Do spam filters and similar measures used by non-workplace
(personal) e-mail accounts, pose particular problems that should be
taken into consideration?
23. What is the current practice for confirming that a participant
received a time-sensitive notice that requires a participant response?
24. What are current practices for ensuring that the e-mail address
on file for the participant is the most current e-mail address? For
example, what are the current practices for obtaining and updating e-
mail addresses of participants who lose their work e-mail address upon
cessation of employment or transfer to a job position that does not
provide access to an employer provided computer?
Comments Regarding Economic Analysis, Paperwork Reduction Act, and
Regulatory Flexibility Act
Executive Order 12866 (EO 12866) requires an assessment of the
anticipated costs and benefits to the government and the public of a
significant rulemaking action, and of the alternatives considered,
using the guidance provided by the Office of Management and Budget.
Under EO 12866, a determination must be made whether implementation of
this rule will be economically significant. A rule that has an annual
effect on the economy of $100 million or more is considered
In addition, the Regulatory Flexibility Act may require the
preparation of an analysis of the impact on small entities of proposed
rules and regulatory alternatives. A regulatory flexibility analysis
must generally include, among other things, an estimate of the number
of small entities subject to the regulations (for this purpose, plans,
employers, and issuers and, in some contexts small governmental
entities), the expense of the reporting, recordkeeping, and other
compliance requirements (including the expense of using professional
expertise), and a description of any significant regulatory
alternatives considered that would accomplish the stated objectives of
the statute and minimize the impact on small entities. For this
purpose, the Agency considers a small entity to be an employee benefit
plan with fewer than 100 participants.
The Paperwork Reduction Act requires an estimate of how many
``respondents'' will be required to comply with any ``collection of
information'' requirements contained in regulations and how much time
and cost will be incurred as a result. A collection of information
includes recordkeeping, reporting to governmental agencies, and third-
The Department is requesting comments that may contribute to the
analyses that will be performed under these requirements, both
with respect to the following specific areas:
25. What costs and benefits are associated with expanding
electronic distribution of required plan disclosures? Do costs and
benefits vary across different types of participants, sponsors, plans,
or disclosures? Are the printing costs being transferred from plans to
plan participants and beneficiaries when information is furnished
26. If electronic disclosure were the default method for
distributing required plan disclosures, and assuming ``opting out''
were an option, what percentage of participants would likely ``opt-
out'' of electronic disclosure in order to receive paper disclosures?
Should participants be informed of increased plan costs, if any,
attendant to furnishing paper disclosures at the time they are afforded
the option to opt out or into an electronic disclosure regime?
27. Do participants prefer receiving certain plan documents on
paper rather than electronically (e.g., summary plan descriptions
versus quarterly benefit statements), and what reasons are given for
such preference? Would this preference change if participants were
aware of the additional cost associated with paper disclosure?
28. What impact would expanding electronic disclosure have on small
plans? Are there unique costs or benefits for small plans? What special
considerations, if any, are required for small plans?
29. Is it more efficient to send an e-mail with the disclosure
attached (e.g., as a PDF file) versus a link to a Web site? Which means
of furnishing is more secure? Which means of furnishing would increase
the likelihood that a worker will receive, read, retain and act upon
30. Employee benefit plans often are subject to more than one
applicable disclosure law (e.g., ERISA, Internal Revenue Code) and
regulatory agency. To what extent would such employee benefit plans
benefit from a single electronic disclosure standard?
Signed at Washington, DC, this 1st day of April, 2011.
Phyllis C. Borzi,
Assistant Secretary, Employee Benefits Security Administration,
Department of Labor.
[FR Doc. 2011-8288 Filed 4-6-11; 8:45 am]
BILLING CODE 4510-29-P