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"Deconstructed" SPD Info on Company Website / Intranet


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We have a company that is considering establishing an intranet or web-based site for providing all of its required ERISA SPDs. This includes various health and welfare benefit plans combined under a wrap document plus it's 401(k) plan. Previously, the company basically prepared paper copies of the various SPDs and then sent a pdf or copy electronically per the applicable ERISA rules so that participants received an electronic copy of the SPD but really had a document that resembled the paper SPD. (Company is aware of special rules required for delivery to those without email / intranet site as part of work functions and need to provide paper copies to COBRA participants and former employees, etc.)

The new arrangement--organized by a national benefits consultant--however takes a new format and delivery approach. In essence, it attempts to provide all the same basic content as the old form SPDs but in a "deconstructed" manner. For example, they try and divide up discussion of the key terms and provisions of each of the various plans / benefits. That also has a separate "administrative" and regulations section that gets cross-listed in the separate benefits descriptions and includes the required ERISA rights section and epparently even the general ERISA-required provisions for the individual plans (e.g., plan administrator contact, plan number, plan funding info.)

In some ways, I think this approach will be easier and quicker for participants--e.g., if you want to see just the eligiblity provisions for the LTD plan, you can click just on the eligibility bar or button and get a page that discusses only the eligibility provisions without getting bogged down in other details. However, on the other hand, I can see how this approach may deprive some participants of the full info they might otherwise obtain if they had a paper copy of the SPD with a table of contents, etc. that more readily listed out other sections and provisions, including provisions that the participants might not have even been aware of or known to take a look at if they didn't stumble across them in getting to the provision they were looking for, etc.

Maybe I'm just too old fashioned but this approach arguably makes the overall SPD more difficult to read and be sure that I've found all the pertinent information when you have to jump from section to section or link to link and might even fail to ever click on or get to the ERISA rights info unless you read all the pages or are otherwise specifically hunting for this.

I am curious if others have gone to a similar system? (Seems that others must have as this is product of a national benefits consulting firm.) If so, I am curious if there have been any particular issues or concerns or if this has been an improvement.

I also have some specific questions or concerns about this approach that I'd be glad for any thoughts on:

1. What do you do with insured benefits (e.g., group life and LTD) where the insurer typically provides a certificate of coverage with a signed letter and seal, etc. from the insurer per applicable dept. of insurance rules, etc. Do you include a copy of this in the SPD for the insured benefits or is it ok to just provide the general summary info? Have the insurers approved delivery of a scaled-down version? (Note, in the sample I've seen, the pertinent info on the plan and benefits is included but not the typical opening page with the certificate and policy info--it just skips to a summary of the pertinent eligiblity, benefits, claims provisions, etc.)

2. Have you encountered any concerns that the choppy and divided nature of the information may fail to satisfy iwth the general format and content requirements for an SPD--i.e., seems like this may make it tougher for some participants to read the SPD than a paper approach but I suppose an argument may be made by some that this is easier.

3. How do you comply with requests for paper copies or sending copies to those without access to the site. It seems to me ideally a paper version of the SPD in its regular written SPD format really should be provided rather than simply printing out all the various sections related to a single plan or benefit but I suppose simply printing out the intranet content should technically satisfy the requirement. Do you provide copies of the entire intranet site on a CD so that you eliminate the problem re lack of access to the intranet site but also avoid having to print out paper copies? (Note, I'm assuming a participant always has the right to request a paper copy although some without intranet access (e.g., former employees) may simply prefer getting the info electronically on disk.) Do you give such individuals a choice between paper and CD?

4. Do you include the provider list for the health plan on the site or just a link to an external site. I understand per the DOL rules updated provider lists should automatically be made available but seems a link to a continuously updated provider list should satisfy that requirement.

5. Do you provide initial COBRA notices through this site. Don't you still need to send those out by mail when participants' spouses and dependents are included and don't have access to the site?

Thanks for any thoughts or insight on this.

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Guest Matthew Gouaux

Providing online access to the SPD may significantly increase the number of participants who actually read and understand it. Just because it's online doesn't mean it cannot also be provided in paper form (or paper-like electronic form). Even if the online version of the SPD meets all the applicable legal requirements, I would suggest also providing a link to a PDF copy of the paper SPD, which should be identical except for formatting to the online version. If any updates are made, you would need to update both the online and PDF versions and keep records of what changes are made and when (as you would with a paper SPD). If you get a request for a paper copy, the request could be filled by printing out the PDF document.

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Matthew,

Thanks for your comments. Providing online access to full pdf was my first thought as well and that seems to make sense to me. I think that may be possible for the immediate future since they have basically just shifted from old paper forms to online version. However, I'm concerned about future updates as I believe the current thinking / advice they have received is to just focus on keeping the online version updated going forward and if somebody doesn't have access to the website they will receive either a CD version of the website information or, if they really want a paper copy, will basically get a print out of the website information. In short, I don't think the consulting firm really contemplates maintaining / updating the paper SPDs going forward.

The insured benefits (LTD, group life, AD&D) will, however, presumably still get printed certificates / SPDs from the insurance company so I suppose those will be available going forward but otherwise I think the plan is to basically just maintain electronic SPD info and print on demand. I think they are concerned that maintaining both the online and paper would be too burdensome as the formatting information between the two is not exactly the same and so updating both for some changes may require more than making identical changes. Any thoughts on that?

On a related front, I'm also puzzling over whether or not there is a need to provide the full certificate for those fully insured LTD and group life benefits or might they simply note that copies of the policies / certificates are available on demand and not include on the SPD site all aspects of the certificate the insurer provides to them for distribution?

Thanks

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Guest Matthew Gouaux

Interesting. Keep in mind the importance of having a file copy of the SPD every time a change is made. Otherwise, you may find it difficult to respond to an issue that requires reference to a prior version of the SPD as of a specific date. In other words, keep records of all changes to the SPD and keep a file copy of each version of the SPD. Will the website provide a "printer-friendly" version of each page? If so, perhaps the most straightforward solution is to make the printer-friendly page as reader-friendly as possible and make a paper (or PDF) file copy every time the SPD changes.

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Thanks. Good point about keeping a printed copy of each version or amendment to the SPD.

In answer to your question, yes the website will have a "print this page" feature so it will be possible to print out each page / section and thus I suppose print out and retain a copy of each change to the agreement.

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  • 1 month later...

The DOL has stated unequivocally that you can't just post the SPD on your intranet or the internet and satisfy the SPD disclosure requirement. You must "furnish" the SPD to participants. You can't just post it on a bulletin board, and you can't just post it on the internet/intranet.

If your consultant says you can, get a new consultant.

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Guest Mel Kiper Jr.

I think a lot of companies have this arrangement. As another said, as long as there is a pdf option, the person can always print it. If you get a Word version of the original intranet posting, just keep saving new versions of it and send it the person who changes the intranet material. They will want a redline to see the changes anyway.

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DoL Reg § 2520.104b-1©

Disclosure through electronic media. (1) Except as otherwise provided by applicable law, rule or regulation, the administrator of an employee benefit plan furnishing documents through electronic media is deemed to satisfy the requirements of paragraph (b)(1) of this section with respect to an individual described in paragraph ©(2) if:

(i) The administrator takes appropriate and necessary measures reasonably calculated to ensure that the system for furnishing documents—

(A) Results in actual receipt of transmitted information (e.g., using return-receipt or notice of undelivered electronic mail features, conducting periodic reviews or surveys to confirm receipt of the transmitted information); and

(B) Protects the confidentiality of personal information relating to the individual's accounts and benefits (e.g., incorporating into the system measures designed to preclude unauthorized receipt of or access to such information by individuals other than the individual for whom the information is intended);

(ii) 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;

(iii) 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 (e.g., the attached document describes changes in the benefits provided by your plan) and of the right to request and obtain a paper version of such document; and

(iv) Upon request, the participant, beneficiary or other individual is furnished a paper version of the electronically furnished documents.

(2) Paragraph ©(1) shall only apply with respect to the following individuals:

(i) A participant who—

(A) Has 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

(B) With respect to whom access to the employer's or plan sponsor's electronic information system is an integral part of those duties; or

(ii) A participant, beneficiary or any other person entitled to documents under Title I of the Act or regulations issued thereunder (including, but not limited to, an “alternate payee” within the meaning of section 206(d)(3) of the Act and a “qualified beneficiary” within the meaning of section 607(3) of the Act) who—

(A) Except as provided in paragraph ©(2)(ii) (B) of this section, has affirmatively consented, in electronic or non-electronic form, to receiving documents through electronic media and has not withdrawn such consent;

(B) In the case of documents to be furnished through the Internet or other electronic communication network, has 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 has provided an address for the receipt of electronically furnished documents;

© Prior to consenting, is 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; and

(D) Following consent, if a change in hardware or software requirements needed to access or retain electronic documents creates a material risk that the individual will be unable to access or retain electronically furnished documents:

(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 of paragraph ©(2)(ii)(A) or paragraph ©(2)(ii)(B) of this section, as applicable, to the receipt of documents through electronic media.

Some ERs that I advise find this more cumbersome to manage than the old fashioned way: paper SPDs and paper SMMs, and logging the names, addresses, methods and dates of delivery. Getting consents, dealing with those that want paper, having to deal with IT updates, etc.

John Simmons

johnsimmonslaw@gmail.com

Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.

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  • 2 months later...
Hi guys,

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  • 1 month later...
Guest PaperlessERISAPlans

The DOL/IRS provides a Safe Harbor for ERISA plans to communicate Electronically with Plan Participants. www.PaperlessERISAPlans.com

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Thanks. I think my original post was both too long and confusing so I'll restate my biggest concern which, after living with this deconstructed SPD for awhile, is still a concern but not sure it's all that big of a deal.

Used to be, company provided its SPDs electronically. It's just that each plan had its own separate stand-alone SPD. You could open the document up, hit print, staple the thing together and you basically had a hard copy just like the old days when they provided hard copies to everybody.

With new website, the health plan spd and 401(k) Plan spd (among others) are basically all together in different sections. You can click on the 401(k) section and get basic overview of 401(k) (and even print out that whole section) but the required ERISA information and claims information is all sort of jumbled up in a different "ERISA information" section they provides basic ERISA information / claims info with a few notes regarding differences among the different plans.

Now when a person wants to read the 401(k) SPD like reading a hard copy version they have to basically go to / click on three different sections of the electronic document. In some ways all of that seems troubling and like a step backward to me.

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  • 5 months later...

I'm a little confused. Are they just posting it on the intranet or sending out the links, such as through an e-mail?

If just posting on the intranet, read the preamble to the final regs. If you do, you will see you can't just post it on your intranet. You have to do more than that.

Again, you can't just post it on your intranet.

You can't just post it on your intranet.

You can't just post it on your intranet.

You can't just post it on your intranet.

I don't care how many companies do it, you can't just post it on your intranet.

At least not yet.

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Thanks for your post. They are NOT just posting on the intranet. They post it there but sent out an electronic notice to employees that it was posted (and wlll send similar notices when amended / updated) and offer hard copies upon request. In a few rare cases they also printed and provided hard copies to those employees without ready email access at work.

My concern is more with what people see when they go to the intranet and the fact that this is basically one very long document covering a mix of different types of plans (health, welfare, 401(k) plus some payroll practices and other policies) with many different "sections" per plan / benefit. Basically, a participant looking for info on the LTD Plan might go to that "section" without ever realizing that there are spearate ERISA information / claims and appeals sections, etc. In some ways having it electronically probably is much more user friendly but in other ways really less so and more confusing because of the number of different arrangements and sections. It's been a year or so now and nobody's really complained or gone to DOL jail, etc. so things are rolling along. It is possible it is just me as I often still prefer to research and read books in print than searching online, etc. I'm an old soul.

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Thanks for your post. They are NOT just posting on the intranet. They post it there but sent out an electronic notice to employees that it was posted (and wlll send similar notices when amended / updated) and offer hard copies upon request. In a few rare cases they also printed and provided hard copies to those employees without ready email access at work.

My concern is more with what people see when they go to the intranet and the fact that this is basically one very long document covering a mix of different types of plans (health, welfare, 401(k) plus some payroll practices and other policies) with many different "sections" per plan / benefit. Basically, a participant looking for info on the LTD Plan might go to that "section" without ever realizing that there are spearate ERISA information / claims and appeals sections, etc. In some ways having it electronically probably is much more user friendly but in other ways really less so and more confusing because of the number of different arrangements and sections. It's been a year or so now and nobody's really complained or gone to DOL jail, etc. so things are rolling along. It is possible it is just me as I often still prefer to research and read books in print than searching online, etc. I'm an old soul.

It sounds like the problem stems from the fact of how the SPD is arranged as a single, mega document, not from the fact that it is online.

John Simmons

johnsimmonslaw@gmail.com

Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.

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Yea, this definitely imposes a risk on the plan sponsor and the plan administrator, particularly in view of the recent case of Amara. I would not recommend it. I could see a table of contents that allows the participant to click on each link. But not something like this.

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