The New Postmark Rule Could Make Employee Benefit Notices Late

Quick Hits

• The USPS recently changed a rule so that postmarks may reflect the processing date, rather than the date a post office obtained a letter or package.
• The new rule could lead to fines for employers if mandatory notices concerning employee benefit plans are deemed late.
• Electronically sending mandatory notices can help to meet a legal deadline, if the recipient has agreed to electronic communications.

Under federal laws like the Employee Retirement Income Security Act (ERISA), the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), the Health Insurance Portability and Accountability Act (HIPAA), and the Affordable Care Act (ACA), employers are required to send a variety of notices to their employees concerning health insurance coverage, retirement benefits, and other employee benefits. For example, depending on the plan type, employers may need to send a summary of benefits and coverage (SBC), a summary plan description (SPD), a list of drugs included in a pharmacy plan formulary, a COBRA coverage notice, a HIPAA privacy notice, a notice of patient protections, a safe harbor notice, an automatic enrollment notice, or a fee disclosure.

In some cases, these notices can be disbursed electronically in a benefits portal or by email, but mailing a paper copy may be legally required if a plan participant has not consented to electronic communications or when there is an obligation to provide the notice to a spouse or dependent, such as in the context of COBRA.

Changing the Postmark Policy

Internal Revenue Code Section 7502, also known as the “mailbox rule,” dictates that if documents or payments are delivered by the USPS after a deadline, they are considered timely filed if the postmark date is on or before the due date. Previously, the USPS postmark date reflected the date when a post office took possession of the letter or package.

In a final rule that took effect December 24, 2025, the USPS changed its policy, indicating that machine-stamped postmarks may reflect the date of automatic processing, rather than the first date the post office obtained possession of the item. Customers can request a manual postmark at a post office if they want to ensure that their letter or package receives a postmark containing a date that aligns with the date when the post office accepted possession.

The postmark date matters for employers to stay legally compliant with their benefit plan notices. For example, general COBRA notices must be sent to new plan participants within ninety days of health coverage starting. COBRA election notices must be sent to an employee within fourteen days after an employer notifies the plan administrator about a qualifying event, such as a layoff, discharge, divorce, or reduction in hours.

Likewise, health plans must send HIPAA notices of privacy practices to enrollees within sixty days of any substantive changes. After a privacy breach, HIPAA-covered entities must notify affected individuals about the breach without unreasonable delay, or no later than sixty calendar days after discovering the breach. 

Employers and health plans may be subject to significant fines and excise taxes if they fail to send the proper notices in a timely manner. In the COBRA context, plan participants can bring claims for civil penalties.

Next Steps

Most plan sponsors outsource the task of providing these notices to third parties. While many vendors may use postal methods that include processing and postmarking mail on-site, others may not have that capacity or may outsource that to postal vendors. This is a good time for employers to raise this question with third-party administrators, recordkeepers, COBRA vendors, and other service providers that they rely on to timely meet benefit plan communication requirements.

Employers and benefit plans that handle mailings themselves may wish to account for the new postmark rule by mailing notices and other plan documents earlier than required, so they can avoid missing a statutory or regulatory deadline. Alternatively, for proof of meeting the deadline, employers and benefit plans can obtain a manual postmark by taking the item to a USPS counter, purchase a certificate of mailing, or use certified or registered mail. 

Because mail in the USPS can be slower, some employers have started relying on private mail couriers to ensure overnight delivery with a receipt; however, that option may be too costly for mass mailings of mandatory notices.

While electronic communications are often permitted for mandatory notices, employers may wish to keep careful records of affirmative consent from plan participants and receipt of the notices, or develop another reasonable compliance strategy for delivery of benefit plan communications that is intended to ensure actual receipt of the information by plan participants and beneficiaries.

Ogletree Deakins’ Employee Benefits and Executive Compensation will continue to monitor developments and will provide updates on the Employee Benefits and Executive Compensation blog as new information becomes available.

Stephanie A. Smithey is a shareholder in Ogletree Deakins’ Indianapolis office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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