ERISA Disclosures in the Era of the Company Intranet
As I prepare to post this article to a blog, I am reminded of how rapidly communications technology has advanced over the last couple decades. In many ways, life has become much easier, as we rely on email, smartphones, cloud servers, and websites to instantly communicate with anybody, at any time, and from almost anywhere in the world. In this spirit, the rise of the company intranet has provided employers with a cheap and convenient means of making “one-click” document disclosures to an vast network of employees. However, as a recent order from a U.S. District Court in New York reminds us, ERISA and convenience rarely see eye-to-eye, and the common use of company intranet postings may lure a plan administrator into complacency with significant consequences.
In Thomas v. Cigna Insurance Group, the court provided a stark reminder that simply posting a summary plan description on the company intranet does not satisfy a set of rather specific Department of Labor regulations addressing the electronic disclosure of documents required to be provided under ERISA. The result? A beneficiary received over $200,000 in benefits from a life insurance policy that might otherwise have been denied because the decedent was not on notice that she had to file for a disability waiver of premium benefit. The DOL electronic disclosure regulations are surprisingly complex, and require that employees have regular access to documents posted on a company’s intranet at any location they are reasonably expected to work. The access to computers must also be an “integral” part of the employee’s duties. While many employees will fit the bill, a large employer with a diverse workforce will rarely find that all of its employees meet these criteria. Employees must also be notified any time there is a change in the posted material in a manner that ensures they receive the notice (e.g., read receipts on emails), and which stress the significance of the posted document. And don’t forget, ERISA also requires that you provide certain documents to terminated employees, beneficiaries, and QDRO recipients, none of whom are likely to have access to your intranet, and who can only affirmatively consent to receive electronic documents after you send them a laundry list of disclosures.
As tempting as it may be to post plan-related documents to your company’s intranet and move on with your daily life, keep in mind that the analysis under ERISA is not as simple as the technology. We can only hope the DOL catches up to the realities of modern electronic communications. Until then, if you post or intend to post plan-related documents to your intranet, take care to make sure you have satisfied all the other requirements in the DOL regulations.