The U.S. Department of Labor (DOL) recently increased the civil penalty amounts that may be imposed on employers for a wide range of benefits-related violations.
These increased amounts apply to civil penalties that are assessed after Jan. 23, 2019. Employers should become familiar with the new penalty amounts and review their pay practices, benefit plan administration, and safety protocols to ensure compliance with federal requirements. The highlights are below.
- Form 5500. The maximum penalty for failing to file Form 5500 (filed annually for most ERISA plans) increases from $2,140 to $2,194 per day that the filing is late.
- Group Health Plans. The maximum penalty for failing to provide the summary of benefits and coverage (SBC) required under the Affordable Care Act increases from $1,128 to $1,156 per failure. Violations of the Genetic Information Nondiscrimination Act (GINA), such as establishing eligibility rules based on genetic information or requesting genetic information for underwriting purposes, and failures relating to disclosures regarding the availability of Medicaid or children’s health insurance program (CHIP) assistance, may result in penalties of $117 per participant per day, up from $114.
- 401(k) Plans. For plans with automatic contribution arrangements, penalties for failure to provide the required ERISA § 514(e)preemption notice to participants increase from $1,693 to $1,736 per day. Penalties for failing to provide blackout notices (required in advance of certain periods during which participants may not change their investments or take loans or distributions) or notices of diversification rights increase from $136 to $139 per day. And the maximum penalty for failure to comply with the ERISA § 209(b) recordkeeping and reporting requirements increases from $29 to $30 per employee.
- Multiple Employer Welfare Arrangements (MEWAs). Penalties for failure to meet applicable filing requirements, which include annual Form M-1 filings and filings upon origination, increase from $1,558 to $1,597 per day.