Penalties just got steeper, friends. This past summer, the US Department of Labor (DOL) announced substantial increases in civil penalty amounts for certain ERISA violations in accordance with the Federal Civil Penalties Inflation Adjustment Act of 2015 (the Act). The increases were determined in accordance with the formula set forth in the Act, and penalties will be adjusted annually going forward.
All of the pertinent civil penalty amounts went up, some more significantly than others; for instance, the penalty for failure to file the annual Form 5500 almost doubled. Increased penalty amounts became effective August 1, 2016, and apply to any penalties assessed after that date.
Some of the applicable penalties for more common ERISA violation related to employee welfare plans are as follows:
| Violation
|
Maximum Penalty for Penalties Assessed On or Before August 1, 2016 | Increased Maximum Penalty for Penalties Assessed After August 1, 2016 for Violations Occurring After November 2, 2015
|
| Failure to File Form 5500
Note: Late filers who voluntarily submit overdue Forms 5500 pay reduced penalties under the Delinquent Filer Voluntary Correction Program. |
$1,100/day per plan
|
$2,063/day per plan
|
| Failure to File Form M-1 (annual MEWA filing) | $1,100 per day | $1,502 per day |
| Failure to timely provide a compliant Summary of Benefits and Coverage per Affordable Care Act (ACA) requirements | $1,000 per failure | $1,087 per failure |
| Failure to provide participants and beneficiaries with required plan documents upon written request (e.g., SPDs, summary annual reports, bargaining agreements, trust agreements, contract or other instruments under which the plan is established or operated) | $100 per day
|
$110 per day
|
| Failure to timely notify participants and beneficiaries of their COBRA rights after a qualifying event. | $100 per day | $110 per day |
| Failure to comply with Medicaid/CHIP notice requirements | $100 per day per employee | $110 per day per employee |
| Violation of Genetic Information Nondisclosure Act (GINA) by group health plan sponsor or health insurer | $100 per day per participant | $110 per day per participant |
| Failure to furnish employee benefit documents (including plan document, trust agreement, summary plan descriptions and summary of material modifications) to the DOL upon request | $110 per day (not to exceed $1,100) |
$147 per day (Not to exceed $1,472) |