DOL Proposes to Expand Electronic Delivery Options for Group Health Plan Disclosures
The U.S. Department of Labor’s (DOL) Employee Benefits Security Administration has issued a proposed rule that would establish a new, additional safe harbor for group health plan administrators to use electronic media to furnish plan disclosures required under the Employee Retirement Income Security Act (ERISA). The proposal aims to modernize the delivery of group health plan disclosures to reduce administrative burdens and improve participants’ ability to access and understand plan information.
Background
In 2002, the DOL established a safe harbor for using electronic media to satisfy ERISA’s delivery method requirements, including email, posting to a company website and other electronic media. The safe harbor allows employers to distribute disclosures electronically to: (1) employees with work-related computer access; and (2) other plan participants and beneficiaries who consent to receive disclosures electronically. The safe harbor applies to ERISA disclosures such as summary plan descriptions, summaries of material modifications and summary annual reports, as well as certain other health plan notices, including the annual Women’s Health and Cancer Rights Act notice and the Medicare Part D notice. In 2020, the DOL established a separate, broader electronic disclosure safe harbor applicable to retirement plans.
Key Highlights
The proposed rule would add a new safe harbor for group health plan administrators to electronically deliver required disclosures, largely mirroring the 2020 retirement plan safe harbor. To rely on the safe harbor, plan administrators would be required to:
- Provide an initial notification to each covered individual prior to relying on the safe harbor, identifying the electronic address to be used, explaining how to access covered documents and describing their right to opt out of electronic delivery and request free paper copies. The notice may be furnished electronically to individuals previously receiving documents under the 2002 safe harbor.
- Furnish a Notice of Internet Availability (NOIA) for each covered document (including documents only required to be furnished upon request) informing covered individuals of their paper copy and opt-out rights. The NOIA must be furnished electronically to a covered individual’s designated address or internet-connected mobile device (e.g., smartphone), contain only the content specified in the proposal, and be delivered separately from other documents or disclosures (but this requirement can be simplified by using a combined annual NOIA covering multiple documents if certain requirements are satisfied).
- Establish and maintain a website or intranet site where covered individuals can access covered documents, taking measures reasonably calculated to ensure the site meets specified standards for timing, presentation and confidentiality.
- Promptly provide a free paper copy of any covered document upon request.
Unlike the 2020 retirement plan safe harbor, email delivery is not available under this proposal, as many ERISA group health plan disclosures contain sensitive information, including protected health information. Additionally, at this time, these rules would only apply to medical/dental/vision plans, not to life, disability, etc.
Employer Takeaway
The DOL is seeking comments (which we will be submitting along with our industry groups), so until the rule is finalized, plan administrators should continue to comply with existing disclosure requirements. Once finalized, this would create an additional safe harbor option, though group health plans would be able to continue to use the 2002 safe harbor for electronic delivery or provide paper documents.
IRS Announces Health Plan Affordability Percentage for 2027 (Pay-or-Play Rules)
On July 21, 2026, the IRS released Revenue Procedure 2026-26 to index the contribution percentage in 2027 for determining the affordability of an employer’s health plan under the Affordable Care Act (ACA). For plan years beginning in 2027, employer-sponsored coverage will be considered affordable under the ACA’s “pay-or-play” rules if the employee’s required contribution for self-only coverage does not exceed 10.22% of their household income for the year.
Affordability Test
The ACA’s pay-or-play rules require applicable large employers (ALEs) to offer affordable, minimum-value health coverage to their full-time employees (and dependents) or risk paying a penalty. The affordability of health coverage is a key point in determining whether an ALE may be subject to a penalty. An ALE’s health coverage is considered affordable if the employee’s required contribution to the plan does not exceed 9.5% (as adjusted annually) of the employee’s household income for the taxable year. This percentage is adjusted each year based on health plan premium growth rates in relation to income growth rates.
In recent years, the affordability percentage has been adjusted to:
- 8.39% for plan years beginning in 2024;
- 9.02% for plan years beginning in 2025;
- 9.96% for plan years beginning in 2026; and
- 10.22% for plan years beginning in 2027.
For purposes of the pay-or-play rules, the affordability test applies only to the portion of the annual premiums for self-only coverage and does not include any additional cost for family coverage. Also, if an employer offers multiple health coverage options, the affordability test applies to the lowest-cost option that provides minimum value.
Because an employer generally will not know an employee’s household income, the IRS has provided three optional affordability safe harbors that ALEs may use to determine affordability based on information that is available to them: the Form W-2 safe harbor, the rate of pay safe harbor and the federal poverty level safe harbor.
To illustrate this increase, the maximum monthly premium you could charge someone who earns $12/hour (assuming they work 40 hours per week for the W-2 method) using the three safe harbor methods would be:
W-2Rate of PayFPL*
| W-2 | Rate of Pay | FPL* | |
|---|---|---|---|
| 2026 | $207.17 | $155.38 | $134.46 |
| 2026 | $212.58 | $159.43 | $139.67 |
*Illustrative and assumes a “normal” FPL increase in 2027 – final amount will come out in early 2027.
Employer Takeaway
This is an increase from the affordability contribution percentage for 2026 and the highest this percentage has ever been. As a result, employers may be able to increase employees’ health coverage contributions for 2027 while still meeting the adjusted affordability percentage. Please contact your Higginbotham representative if you need assistance calculating affordability rates for your workforce.
EEOC Publishes a Proposed Rule to Eliminate EEO-1 Reporting Requirements
On July 23, 2026, the U.S. Equal Employment Opportunity Commission (EEOC) published a Notice of Proposed Rulemaking to eliminate EEO-1 reporting requirements for private employers.
Background
The EEO-1 reporting is a federally mandated survey that collects workforce data categorized by race, ethnicity, sex and job category. Under Title VII of the Civil Rights Act, employers with 100 or more employees and certain federal contractors must report this data to the EEOC by March 31 of every year.
With limited exceptions, the following entities must file EEO-1 Reports by March 31 every year (or any later submission deadline set by the EEOC):
- A private employer with 100 or more employees (with limited exceptions for schools and other organizations)
- A private employer with between 15 and 99 employees, if they are part of a group of employers that legally constitutes a single enterprise, which employs a total of 100 or more employees
- A federal contractor with 50 or more employees that is either a prime contractor or first-tier subcontractor and has a contract, subcontract or purchase order amounting to $50,000 or more
An employer that fails or refuses to file an EEO-1 Report as required may be compelled to do so by a federal District Court. Federal contractors also risk losing their government contracts for noncompliance.
Key Highlights
The proposed rule would rescind and remove EEO-1 reporting requirements for private employers. The EEOC’s proposed rule would also rescind the filing requirements for the EEO-2, EEO-3, EE0-4, EE0-5 and EEO-6 reports, which apply to public employers, unions and educational institutions, as well as the record keeping and record preservation requirements related to these reports. According to the EEOC, these reports are inconsistent with equal employment opportunity law and potentially unconstitutional.
Employer Takeaway
The 30-day public comment period for the EEOC’s proposed rule ends on Aug. 24, 2026. The commission encourages all interested parties to submit comments on the proposed rule. Employers should monitor updates on the EEOC’s proposed rule, including the publication of a final rule and any related legal changes.
The EEOC has not yet announced the opening date and filing deadline for 2025 EEO-1 reports. It’s unclear how the proposed rule might impact the filing of 2025 EEO-1 reports. Therefore, employers should monitor the EEOC’s proposed rule and EEO-1 Data Collection page for any developments to remain compliant.
