DOL Proposes New, Additional Electronic Delivery Safe Harbor for Group Health Plans

The U.S. Department of Labor (DOL) has proposed a new optional electronic disclosure safe harbor that would expand the way ERISA-covered group health plans provide required notices and disclosures to participants and beneficiaries. If finalized, the proposal would give employers and plan administrators greater flexibility to deliver many required documents electronically while reducing printing and mailing costs.

The proposed rule does not replace existing disclosure methods. Instead, it introduces an additional voluntary option that group health plans may use along with the DOL's existing electronic disclosure safe harbor or traditional paper delivery.

Why the DOL Is Proposing This Change

When the DOL established the electronic disclosure rules in 2002, electronic communication was far less common than it is today. Since then, employees have increasingly relied on email, smartphones, and online benefit portals to receive important information.

Recognizing these changes, the DOL previously adopted a modern electronic disclosure safe harbor for retirement plans in 2020. The agency is now proposing a similar framework for ERISA-covered group health plans to make participant communications more efficient while maintaining participant protections.

According to the DOL, group health plans currently distribute as many as 11 billion sheets of paper disclosures each year. The agency estimates the proposed safe harbor could reduce administrative costs by approximately $3.9 billion over the next decade while improving participants' access to benefit information.

How the Proposed Safe Harbor Would Work

Under the proposal, plan administrators could satisfy many ERISA disclosure requirements by posting required documents on a secure website or online benefits portal and furnishing participants and beneficiaries with a notice of internet availability (NOIA) directing them to those documents.

Notably, the proposed safe harbor does not include a direct email delivery option for covered documents - a key difference from the 2020 retirement plan safe harbor, which permits email delivery. The DOL excluded this option primarily due to privacy concerns, because group health plan disclosures may contain protected health information (PHI) that could be exposed if sent to an employee's company-monitored email inbox.

Before relying on the safe harbor for an individual, the administrator would need to furnish an initial notification on paper stating that covered documents will be delivered electronically, identifying the electronic address that will be used, providing instructions for accessing documents, and describing the individual's rights to request paper copies and to opt out of electronic delivery.

To use the safe harbor, plans would need to satisfy specific conditions designed to ensure participants receive timely access to required information. Individuals would also retain important consumer protections, including:

• The ability to request paper copies of disclosures at no charge.
• The right to opt out of electronic delivery and continue receiving paper documents.
• The requirement to receive electronic notices that are understandable, accessible, and reasonably calculated to ensure actual receipt.

Existing Electronic Delivery Rules Would Remain Available

Importantly, the proposal would not eliminate the DOL's existing 2002 electronic disclosure safe harbor.

If finalized, employers and plan administrators could continue using the current rules, which generally permit electronic delivery to employees who are considered "wired at work" or to individuals who consent to receiving electronic disclosures. Traditional paper delivery would also remain an acceptable option.

The new safe harbor would simply provide an additional compliance option for employers seeking greater flexibility.

What Types of Plans Are Affected?

The proposed rule applies to ERISA-covered group health plans - that is, employee welfare benefit plans to the extent they provide medical care, as defined under Section 733(a)(1) of ERISA. This includes employer-sponsored medical plans and, in certain scenarios, benefits such as vision and dental when provided as part of a group health plan.

The safe harbor does not extend to other types of welfare benefit plans, such as life insurance, disability, accident, sickness, unemployment, or stand-alone vision or dental plans. Employers that use a wrap document covering both health and non-health welfare benefits would need to continue relying on the 2002 safe harbor for the non-health portions.

The proposal does not change the content of required notices or create new disclosure obligations. Instead, it focuses solely on the way existing required documents may be furnished to participants and beneficiaries.

Current Status

The DOL issued the proposed rule on July 22, 2026, with publication in the Federal Register on July 23, 2026 (91 Fed. Reg. 46602). Public comments are due by September 21, 2026. Because the rule is still in the proposal stage, employers are not yet required to change their current disclosure practices. The agency will review public comments before deciding whether to issue a final rule.

If finalized, the rule would apply on the first day of the first calendar year following publication of the final rule.

Employer Action Items

Although no immediate action is required, employers and plan sponsors may wish to begin evaluating how the proposed rule could affect their employee communications if it is finalized.

• Review your current process for distributing required ERISA health plan disclosures.
• Determine whether your organization maintains accurate participant email addresses and electronic contact information.
• Evaluate whether your benefits administration platform or employee portal could support the proposed notice-and-access model, including posting documents online and furnishing notices of internet availability.
• Continue following the existing 2002 DOL electronic disclosure rules or provide paper disclosures until any new safe harbor becomes final.
• Monitor future DOL guidance and the final rule for implementation dates and any changes made during the rulemaking process.

ACA Affordability Threshold Increases to 10.22% for 2027

The IRS has announced that the Affordable Care Act (ACA) affordability threshold will increase to 10.22% for plan years beginning in 2027, up from 9.96% for 2026. The new percentage was established in IRS Revenue Procedure 2026-26.

For applicable large employers (ALEs), generally those with at least 50 full-time and full-time equivalent employees, this percentage is important when determining whether an offer of coverage is affordable under the ACA employer shared responsibility rules. In general, affordability is based on the employee's required contribution for the lowest-cost self-only coverage that provides minimum value. Because employers typically do not know an employee's household income, they may use one of the ACA's affordability safe harbors.

Employer Action Items

The higher 2027 threshold may give employers additional flexibility when setting employee contributions for health coverage. Employers preparing for 2027 should:

• Review employee contribution requirements during renewal and budgeting.
• Update affordability calculations to use the 10.22% threshold for plan years beginning in 2027.
• Confirm that applicable affordability safe harbors are being calculated and applied correctly.
• Coordinate any contribution changes with ACA reporting and compliance processes.

How OVD Optimizes Your ACA Strategy  

Setting employee contribution structures requires balancing competitive benefit offerings with strict ACA compliance. At OVD Insurance, ACA affordability evaluations and safe harbor modeling are integrated directly into our renewal and budgeting reviews. We partner with you to analyze your workforce data, model contribution scenarios under the new 10.22% threshold, and ensure your health plan design avoids costly penalties while maximizing overall cost efficiency. Contact our Employee Benefits team today to review your 2027 strategy. Our team will continue to actively monitor and track all DOL developments regarding the proposed electronic delivery safe harbor, and we will provide comprehensive updates and actionable guidance once the final rule is released.

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Information provided by UBA Partner Firm