The U.S. Department of Labor on Tuesday proposed a new, optional electronic-disclosure safe harbor that would permit group health plans to send required participant notices and documents electronically to individuals who provide an email address or a smartphone number capable of receiving electronic notices.
What the proposal would do
Under the proposal, plan administrators who meet the safe-harbor conditions could rely on electronic distribution as a compliant method for delivering plan information to participants, beneficiaries and other eligible individuals who have provided contact information. The rule is explicitly limited to group health plans and would not extend to all welfare plans.
The proposal borrows much of its structure from a 2020 safe harbor that covered pension plans, with several distinctions tailored to health-plan communications. Among the conditions signaled in the DOL release is a requirement that plans provide a Notice of Internet Availability, or NOIA, informing recipients that a document has been posted for view.
Estimated savings and administrative impact
The Labor Department estimated substantial savings if the safe harbor is finalized. The agency projected roughly $372 million in cost reductions in the first year and close to $395 million annually thereafter, generated largely by lower mailing and administrative expenses.
| Projected savings | Amount |
|---|---|
| First year | $372 million |
| Annual thereafter | $395 million |
Supporters of electronic delivery argue the change could streamline benefits administration, cut paper and postage costs and speed communication to those who prefer digital notices. Critics and consumer advocates have previously warned that electronic-only notices can disadvantage individuals without reliable internet access, limited digital literacy or no stable email address, and the proposal appears to address some of those concerns by making the safe harbor optional and by conditioning its use on recipients providing contact information.
Next steps and public input
The DOL set a comment deadline of Sept. 21, 2026. Following the public-comment period, the agency may revise the proposal before issuing a final rule. The announcement indicated the plan administrator obligations and consumer protections would be detailed in the rule text and supporting materials.
- Applies only to group health plans, not all welfare plans.
- Requires a Notice of Internet Availability to alert individuals when documents are posted.
- Targets participants, beneficiaries and other eligible individuals who provide an email address or smartphone number.
The proposal is modeled largely on the 2020 pension-plan safe harbor but includes notable exceptions to reflect the differences between pension and health-plan communications. The DOL said details on those exceptions and the full framework would be provided in the rulemaking package.
Industry observers and benefits consultants are likely to scrutinize the proposal for operational practicality, compliance costs associated with managing digital contact lists and the interplay with state privacy and consumer-protection laws. Employers and plan sponsors will also evaluate whether the safe harbor changes their exposure to liability for failed deliveries or for failing to provide adequate notice under other federal statutes.
Comments from stakeholders will inform the final regulation. The DOL’s estimate of hundreds of millions of dollars in savings frames the proposal as a cost-saving modernization of benefits administration, but how those savings are realized and balanced against access and equity concerns will shape the debate during the public-comment period.
WE NEWS will continue to follow the rulemaking, review the detailed proposal as published in the Federal Register and report on how the changes could affect employers, health-plan participants and the benefits industry.
