Benefits, Health Care Reform, Reporting & Disclosure, Taxes, Fees & Penalties

2018 Increases to DOL Fines for Violations of ERISA & other Federal Laws

The Department of Labor (DOL) issued a final rule (January 2, 2018) that increases the DOL civil monetary penalties for violations of the Employee Retirement Income Security Act (ERISA) and other federal laws such as the Fair Labor Standards Act (FLSA), Family Medical Leave Act (FMLA) and Occupational Safety and Health Act (OSHA). The increased amounts apply for penalties assessed after January 2, 2018 (for any violations that occurred after November 2, 2015.)

Examples of Actions Subject to DOL Fines

  • Failure to file Form 5500 or M-1 (MEWAs).
  • Failure to provide a Summary of Benefits and Coverage (SBC).
  • Failure to furnish information required by the DOL
  • Repeated violations of minimum wage or overtime requirements under FLSA
  • Willful violations of the poster requirement under the FMLA or OSHA.

Action Steps for Employers

Employers should become familiar with the new penalty amounts and review their benefit plan administration, pay practices and safety protocols to ensure they are in compliance with federal requirements.

Background

The 2015 Inflation Adjustment Act (Act) included provisions to strengthen civil monetary penalties under various federal laws in order to maintain their deterrent effect. The Act required an initial “catch-up” adjustment in 2016, and since 2017 has required the DOL and other federal agencies to adjust their civil monetary penalties annually for inflation, no later than January 15th, and to post these changes on their websites.  (Click here for a prior article about the Inflation Adjustment Act and DOL increases in 2016.)

Matrix of Penalty Amounts

The following matrix lists the increased penalties that apply to group health and welfare plans under ERISA, pursuant to the Inflation Adjustment Act.  The full matrix on the DOL website also includes many penalties that apply to retirement plans, and to employers pursuant to other laws administered by the DOL.   Click here  for the regulations.

Description of ERISA Violations Subject to Penalty ERISA Section 2017 Penalty Amount 2018 Penalty Amount
Form 5500. Failure to file ERISA §502(c)(2) (5500) Up to $2,097 per day Up to $2,140 per day
Form M-1. Failure to file by multiple employer welfare arrangement (MEWA) ERISA §502(c)(5) Up to $1,527 per day Up to $1,558 per day
Failure to furnish information requested by DOL under ERISA § 104(a)(6) ERISA 502(c)(6) Up to $149 per day not to exceed $1,496 per request Up to $152 per day not to exceed $1,527 per request
SBC. Failure to provide Summary of Benefits Coverage. Public Health Services Act section 2715(f), as incorporated into ERISA § 715 and 29 CFR 2590, 715-2715(e). ERISA § 715 (SBC) Up to $1,105 per failure Up to $1,128 per failure
CHIP.   Employer failure to inform employees of CHIP coverage opportunities under ERISA § 701 (f)(3)(B)(i)(I)- each employee a separate violation ERISA §502(c)(9)(A) (CHIP) Up to $112 per day Up to $114 per day
GINA. Failure by any group health plan sponsor, or any health insurance issuer, 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 ERISA 502(c)(10) (B)(I) (GINA) $112 per day during non-compliance period $114 per day during non-compliance period
GINA. Minimum penalty for de minimis violations of GINA (genetic information requirements) not corrected prior to notice from DOL. ERISA §502(c)(10) (C)(i) (GINA) $2,790 minimum $2,847 minimum
GINA. Minimum penalty for non de minimis violations that are not corrected prior to notice from DOL. ERISA §502 (c)(10) (C) (ii) (GINA) $16,742 minimum $17,084 minimum
GINA. Cap on unintentional failures to meet genetic information requirements ERISA §502(c)(10) (D)(iii)(II) $558,078 maximum $569,468 maximum
Description of Non-ERISA Violations Subject to Penalty Cite 2017 Penalty Amount 2018 Penalty Amount
FLSA.   Repeated or willful violations of overtime or minimum wage requirements. FLSA Up to $1,925 per violation Up to $1,964 per violation
FMLA. Willful failure to post FMLA general notice. FMLA Up to $166 per violation Up to $169 per violation
OSHA. Violation of posting requirements. OSHA Up to $12,675 per violation Up to $12,934 per violation
Violations of Employee Polygraph Protection Act (EPPA) EPPA Up to $20,111 per violation Up to $20,521 per violation

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