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SPD - Summary Plan Description & Employee Notice Delivery Requirements

Employers offering health and welfare benefits such as medical, dental, life, and disability insurance must provide all participants with a Summary Plan Description (SPD) or an SPD Wrap document. In addition, various other notices must be provided, depending on the number of employees and benefits setup such as: COBRA, CHIP, MHPA, NMHPA, HIPAA, WHCRA, Wellness, Grandfathered Plan, Exchange, Medicare Part D, and other notices.

In order to meet delivery requirements, SPDs and Notices must be delivered to participants in a way “reasonably calculated” to ensure actual receipt.
The electronic and non-electronic methods described in this article, along with the attached handouts, will help your company meet these ERISA requirements. 

Use one of the below distribution methods to distribute the SPD document and component plan documents to all benefit plan participants. Be prepared to prove that you furnished the SPD(s), Wrap, and Employee Notices.

SPD Non-Electronic Methods of Delivery

US Mail

 Material distributed through the mail may be sent by first, second, or third-class mail. However, distribution by second or third-class mail is acceptable only if return and forwarding postage is guaranteed and address correction is requested. Any material sent by second or third-class mail which is returned with an address correction shall be sent again by first-class mail or personally delivered to the participant at his or her worksite. For distribution of documents/materials in a format other than paper, such as electronic storage devices including CD-R and flash/memory stick, consent must be obtained from employees of their ability to access such devices for viewing of materials.

Hand Delivery:

 If using a hand delivery method, consider obtaining a receipt from participants of the notice delivery. It is not acceptable to merely place copies of the material in a location frequented by participants. 

Periodical/Company Publications: 

It is acceptable to deliver documents as a special insert in a periodical distributed to employees, such as a union newspaper or a company publication, if the distribution list for the periodical is comprehensive and up-to-date. It must also show a prominent notice on the front page of the periodical advising readers that the issue contains an insert with important information about rights under the plan.
If some participants and beneficiaries are not on the mailing list, a periodical must be used in conjunction with other methods of distribution.

Electronic Delivery Methods

Work Email:

Documents can be sent via email (without consent) to employee’s work email address, as long as the following is in place:
1.the work email is specifically for and used by the employee on a regular basis as a part of daily work responsibilities;
2.an actual receipt of transmitted information is confirmed, such as through failure to deliver notice, periodic review or survey of employees to confirm materials are being received or confirmation receipt received by sender from recipient;
3.the email includes a statement as to the significance of the document;
4.contains the right to request a paper version at no cost and instructions on how to request copy, and the notice content does not contain any identifiable protected personal information.

Personal Email:

If employees do not have a primary work-issued email address, they may elect, with written consent, to provide the employer with a personal email address for receipt of specific electronic notices. This consent must be obtained yearly and must include the following:

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.

Company Intranet: 

Employers may post documents to a designated site on the Internet. Under this method, the employer must ensure employees have the ability to, and can access, these documents at will during and after business hours. Employers must provide a separate notification sent via electronic or non-electronic method to each employee notifying them of:

1.the document’s availability;
2.the importance of the information contained the documents;
3.the right to receive this information by another acceptable means, non-electronic or electronic, as described above.

Documentation: 

Regardless of the distribution method used, the employer should always retain evidence of the notice being given, including a copy of the notice(s), the date provided, and to whom it was provided.
These notices and any other relevant Plan Documents or Notices should be made available to employees upon request at no cost. For purposes of section 104(b)(4) of the Act, materials furnished upon written request shall be mailed to an address provided by the requesting participant or beneficiary or personally delivered to the participant or beneficiary.

by Debbie Siddoway, HR Coach & Ken Spencer, President

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