- The U.S. Department of Labor (DOL) recently issued its annual inflation-adjusted penalty amounts for certain Employee Retirement Income Security Act (ERISA) violations.
- The adjusted amounts are intended to create greater incentives to comply with certain federal laws applicable to health and welfare benefit plans.
- Federal agencies, including the DOL, are required to make annual adjustments to the adjusted civil penalty amounts by January 15 each year.
- The 2019 adjustments are effective for penalties assessed after January 23, 2019 with respect to violations occurring after November 2, 2015.
Legislation enacted in 2015 requires federal agencies to adjust for inflation certain penalty amounts by January 15 of each year to create greater incentives for plan sponsors to comply with their health and welfare benefit plan obligations. The law specifically requires the DOL to adjust penalties applicable to health and welfare benefit plans that the agency regulates under ERISA. In 2018, the DOL provided adjusted penalty amounts for violations assessed after January 2, 2018 with respect to violations occurring after November 2, 2015. This past month, the DOL issued adjusted amounts – as shown in the table on the following pages – for penalties assessed after January 23, 2019, with respect to violations occurring after November 2, 2015.
Employers should review their health plans to ensure compliance with ERISA’s requirements in order to avoid penalties. For example, employers should make sure they are complying with ERISA’s reporting and disclosure rules, including Form 5500, annual CHIP notice and SBC requirements.
ADJUSTMENTS FOR 2019
The increased amounts shown below apply to penalties assessed after January 23, 2019.
|REQUIREMENT||2018 ADJUSTED PENALTY AMOUNTS||2019 ADJUSTED PENALTY AMOUNTS|
|Failure or refusal to file an annual report (Form 5500) with the DOL (unless a filing exemption applies)||Up to $2,140 per day||Up to $2,194 per day|
|Failure of a multiple employer welfare arrangement (MEWA) to file an annual report (Form M-1) with the DOL||Up to $1,558 per day||Up to $1,597 per day|
|Failure to furnish plan-related information requested by the DOL|
*Under ERISA, administrators of employee benefit plans must furnish to the DOL any documents relating to the employee benefit plan upon request
|Up to $152 per day, not to exceed $1,527 per request||Up to $156 per day, not to exceed $1,566 per request|
|Failure to provide the annual notice regarding Children’s Health Insurance Program (CHIP) coverage opportunities|
*This notice applies to employers with group health plans that cover residents of states that provide a premium assistance subsidy under CHIP
|Up to $114 per day for each failure (each employee is a separate violation)||Up to $117 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 $114 per day (each participant/beneficiary is a separate violation)||Up to $117 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||$114 per participant or beneficiary per day during noncompliance period||$117 per participant or beneficiary per day during noncompliance period
|Failure to provide Summary of Benefits and Coverage (SBC)||Up to $1,128 per failure to provide the SBC||Up to $1,156 per failure to provide the SBC|
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EPIC offers this material for general information only. EPIC does not intend this material to be, nor may any person receiving this information construe or rely on this material as, tax or legal advice. The matters addressed in this document and any related discussions or correspondence should be reviewed and discussed with legal counsel prior to acting or relying on these materials.