The Department of Labor is proposing a new rule that would let employer group health plans deliver required documents to workers electronically by default, a change the department estimates could save plans $3.9 billion over the next decade.
The proposed rule, issued July 22, would create a safe harbor letting the roughly 2.8 million group health plans covered by ERISA post documents such as summary plan descriptions, COBRA notices and claims denials to a website versus mailing paper copies to participants. Group plans currently print and mail up to 11 billion sheets of paper a year, the DOL said in a news release.
The proposal assumes insurers and third-party administrators will host the websites, generate the notices and manage opt-out requests, and it lets them rely on the safe harbor when they have a written agreement to handle a plan’s disclosures. The department estimates the rule would affect about 2.8 million ERISA-covered group health plans, 135 million participants and beneficiaries, 373 insurers and 205 TPAs.
The department said the rule could cost plans about $30 million in the first year, mostly for reviewing the rule and preparing notices. The proposal largely mirrors the “notice and access” model created for retirement plans in 2020, though it would not allow documents to be sent by email. Group plans could also continue using the older 2002 electronic delivery rule or keep mailing paper.
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