Compliance Alert (PDF).pdf

- Issued by: U.S. Department of Labor (DOL)
- Date: February 1, 2020

Quick Facts:
- The DOL adjusts penalty amounts annually to incentivize compliance with ERISA regulations for health and welfare benefit plans.
- Adjustments are effective for penalties assessed after January 15, 2020, regarding violations occurring after November 2, 2015.

Background:
- Legislation from 2015 requires federal agencies to adjust inflation-adjusted penalty amounts by January 15 each year.
- This past month, the DOL released updated penalty amounts for various ERISA violations.

Action Steps for Employers:
- Review health plans for ERISA compliance to avoid penalties.
- Ensure adherence to reporting and disclosure rules (Form 5500), CHIP notice requirements, and Small Group Health Insurance Options (SGHI) regulations.

2020 Adjusted Penalty Amounts:

| Requirement | 2019 Adjusted Penalty Amounts | 2020 Adjusted Penalty Amounts |
|---|---|---|
| Failure to file annual report (Form 5500) | Up to $2,194/day | Up to $2,233/day |
| Failure to file for MEWA (multiple employer welfare arrangement) | Up to $1,597/day | Up to $1,625/day |
| Failure to furnish plan-related info requested by DOL | Up to $156/day (not to exceed $1,566 per request) | Up to $159/day (not to exceed $1,594 per request) |
| Failure to provide CHIP coverage notice | Up to $117/day per employee | Up to $119/day per employee |
| Failure to disclose group health plan info to state re: Medicaid/CHIP participants | Up to $117/day per participant/beneficiary | Up to $119/day per participant/beneficiary |
| Non-compliance with Genetic Information Nondiscrimination Act (GINA) | $117/day per participant/beneficiary; min. $2,919 per participant/beneficiary for de minimis failures | $119/day per participant/beneficiary; min. $17,515 per participant/beneficiary for non-de minimis failures; cap of $583,830 |
| Failure to provide Summary of Benefits and Coverage (SBC) | Up to $1,156 per failure | Up to $1,176 per failure |

*Note: The DOL outlines minimum penalties for specific violations. Unintentional failures have a cap on the total penalty amount.