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Health and Welfare, Retirement

DOL Increases Civil Penalties for ERISA Violations

Beginning August 1, 2016, the Department of Labor’s (DOL) interim final rule increasing civil monetary penalties increase for failure to follow ERISA’s disclosure and reporting requirements goes into effect. These new amounts will be adjusted for inflation in 2017, and each subsequent January. The table below shows the updated maximum penalty amounts effected by the DOL interim final rule. Please be aware that the excise tax for group health plan violations, including Affordable Care Act market reform violations, remains unchanged.

Requirement Current Penalty Amount New Penalty Amount
Failure to file an annual report (Form 5500) with the DOL (unless a filing exemption applies) Up to $1,100 per day Up to $2,063 per day
Failure of a multiple employer welfare arrangement (MEWA) to file an annual report (Form M-1) with the DOL Up to $1,100 per day Up to $1,502 per day
Failure to furnish plan-related information requested by the DOL

*Under ERISA, administrators of employee benefit plans must furnish to the DOL, upon request, any documents relating to the employee benefit plan, including but not limited to, the latest summary plan description (including any summaries of plan changes not contained in the summary plan description), and the bargaining agreement, trust agreement, contract or other instrument under which the plan is established or operated.

Up to $110 per day, but not to exceed $1,100 per request Up to $147 per day, but not to exceed $1,472 per request
Failing to provide the annual notice regarding CHIP coverage opportunities
*This notice applies to employers with group health plans that cover residents of states that provide a premium assistance subsidy under CHIPRA.
Up to $100 per day for each failure (each employee is a separate violation) Up to $110 per day for each failure (each employee is a separate violation)
Failure to timely disclose information to a state regarding group health plan coverage of an individual who is covered under a Medicaid or CHIP plan Up to $100 per day (each participant/beneficiary is a separate violation) Up to $110 per day (each participant/beneficiary is a separate violation)
Failure by any health plan sponsor (or any health insurance issuer offering health insurance coverage in connection with the plan), to comply with the requirements of the Genetic Information Nondiscrimination Act (GINA) for health plans $100 per participant or beneficiary per day during noncompliance period

Minimum penalty of $2,500 per participant or beneficiary for de minimis failures not corrected prior to notice from the DOL

Minimum penalty of $15,000 per participant or beneficiary for failures which are not corrected prior to notice from the DOL and are not de minimis

$500,000 cap on unintentional failures

$110 per participant or beneficiary per day during noncompliance period

Minimum penalty of $2,745 per participant or beneficiary for de minimis failures not corrected prior to notice from the DOL

Minimum penalty of $16,473 per participant or beneficiary for failures which are not corrected prior to notice from the DOL and are not de minimis

$549,095 cap on unintentional failures

Failure to provide Summary of Benefits and Coverage (SBC) Up to $1,000 per failure to provide the SBC Up to $1,087 per failure to provide the SBC

 

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