Starting in October, You May Deliver COBRA Notices Electronically - But Should You?

OnQue Technologies, Inc.

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Starting in October, You May Deliver COBRA Notices Electronically - But Should You?
August 19, 2002 Santa Rosa, CA
Effective October 9, 2002, employee benefit plans will be permitted to use electronic media to satisfy the notice requirements of COBRA Section 606. But before firing off email messages to employees and beneficiaries who are entitled to receive COBRA notifications, be aware of certain legal standards that must be met when furnishing documents electronically. Numerous conditions apply to the use of electronic delivery. Plan administrators must take steps to ensure that electronic systems for providing documents will reasonably result in their actual receipt, and also protect the confidentiality of personal information. The new regulation applies only to those COBRA notices required to be provided by the employer or plan administrator - not to notices that must be provided to plan administrators by others, such as spouses or dependents. Electronic notices may be sent to employees either at the workplace or at non-workplace sites. Those who work at home or travel, or who otherwise do not have workplace computer access, may receive electronic notices as long as they have ready access to the employer's information system. According to the Pension and Welfare Benefits Administration (PWBA), it is acceptable to post general notices, such as Summary Plan Descriptions, to the company's website if a prominent notice appears on the site's first page advising readers that the notice provides important benefits plan information. Spouses and beneficiaries, who would receive COBRA notices away from the workplace, must affirmatively consent to receive them in electronic form, and provide the address for such receipt. But before that consent is legally sufficient, the employer or plan administrator must first provide a statement that clearly describes: the documents which may be sent electronically; the right to withdraw consent at any time; the procedures for withdrawing consent and updating receipt information; the software and hardware requirements; and the right to ask for and receive a paper version of any electronic document. (Note that adhering to these legal requirements may make it difficult to comply with ERISA notification time limits.) In addition to these and other complex conditions required for the proper delivery of notices by electronic means, employers and plan administrators must also comply with legal standards for retaining and maintaining records of electronic transmissions. They must ensure the accuracy and authenticity of the electronic notices and maintain a safe system for storage and inspection. And only if the electronic recordkeeping system complies with the terms of the new regulations, may paper records be destroyed after they are transferred to the electronic system. To see the complete requirements of the new rule, go to: 67 Federal Register 17263, April 9, 2002



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