Health Care Reform, Penalties

DOL Increases Fines for ERISA Violations after August 1

The Department of Labor (DOL) has issued an interim final rule (June 30, 2016) to increase for inflation the civil monetary penalties enforceable by the DOL for violations of the Employee Retirement Income Security Act (ERISA). The DOL published a Fact Sheet that lists the prior and increased penalty amounts, as well as FAQs .

The increased amounts will apply for penalties assessed after August 1, 2016 (even if the violation occurred before August 1).  Beginning in 2017, the DOL Employee Benefit Security Administration (EBSA) will adjust the new ERISA Title I penalty amounts annually for inflation no later than January 15th of each year.  For example, by January 15, 2017, the DOL-EBSA will adjust penalty amounts to reflect any increase in inflation from October 2015 to October 2016, and will post any changes to the penalty amounts on its website.

Some examples of the increased penalty amounts:

  •  Failure to file Form 5500: Penalty will increase from $1,100 to $2,063 per day.
  • Failure to provide a Summary of Benefits and Coverage: Penalty will increase from $1,000 to $1,087 per failure.
  • Failure to furnish information requested by DOL: Penalty will increase from $100 to $147 per day.

The following matrix lists the increased penalties that apply to group health and welfare plans under ERISA.  The full matrix also includes many penalties that apply to retirement plans, and to employers pursuant to other laws administered by the DOL.  The penalties are increased pursuant to the Inflation Adjustment Act.  A list of all increased penalty amounts is here.

ERISA Penalty Statue Description of ERISA Violations Subject to Penalty Current Penalty Amount New Penalty Amount
ERISA §502(c)(2) (5500) Failure or refusal to file annual report (form 5500) required by ERISA 104. Up to $1,100 per day Up to $2,063 per day 
ERISA §502(c)(5) (MEWA) Failure of a multiple employer welfare arrangement to file report required by regulations issued under ERISA §101(g) Up to $1,100 per day Up to $1,502 per day
ERISA §502(c)(6) Failure to furnish information requested by Secretary of Labor under ERISA § 104(a)(6) Up to $110 per day not to exceed $1,100 per request Up to $147 per day not to exceed $1,472 per request
ERISA §502(c)(9)(A) (CHIP) Failure by an employer to inform employees of CHIP coverage opportunities under ERISA § 701 (f)(3)(B)(i)(I)- each employee a separate violation Up to $100 per day Up to $110 per day
ERISA §502(c)(9)(B) (CHIP) Failure by a plan administrator to timely provide to any State the information required to be disclosed under ERISA § 701(f)(3)(B)(ii), regarding coverage coordination- each participant/beneficiary a separate violation Up to $100 per day UP to $110 per day
ERISA §502(c)(10) (B)(I) (GINA) Failure by any plan sponsor of a group health plan, or any health insurance issuer offering health insurance coverage in connection with the plan, to meet the requirements of ERISA §§ 702 (a)(1)(F), (b)(3), (c) or (d); or § 701; or § 702(b)(1) with respect to genetic information $100 per day during non-compliance period $110 per day during non-compliance period
ERISA §502(c)(10) (C)(i) (GINA) Minimum penalty for de minimis failures to meet genetic information requirements not corrected prior to notice from Secretary of Labor. $2,500 minimum $2,745 minimum 
ERISA 502 § (c)(10)(C) (ii) (GINA) Minimum penalty for failures to meet genetic information requirements which are not corrected prior to notice from Secretary of Labor and are not de minimis. $15,000 minimum $16,473 minimum
ERISA § 502(c)(10)(D)(iii)(II) (GINA) Cap on unintentional failures to meet genetic information requirements $500, 000 maximum $549,095 maximum
ERISA § 715 (SBC) Failure to provide Summary of Benefits Coverage under Public Health Services Act section 2715(f), as incorporated into ERISA section § 715 and 29 CFR 2590, 715-2715(e). Up to $1,000 per failure Up to 1,087 per failure