Plan mistakes got more expensive

Blog Post

The Department of Labor’s (DOL) Employee Benefit Security Administration (EBSA) has authority to impose various monetary civil penalties under the Employee Retirement Income Security Act of 1974 (ERISA). For many years, these various penalties remained unchanged. However, due to relatively recent legislation, the DOL was required to adjust the penalties for inflation by July 1, 2016, and to do so annually hereafter.

In response to that requirement, various DOL penalties have been increased effective August 1, 2016. The following are only a sampling of the new penalty amounts adjusted for inflation:

Description of ERISA    Violations Subject to Penalty	Current Penalty   Amount	New Penalty Amount
Failure to file Form 5500	Up to $1,100/day	Up to $2,063/day
Failure to provide benefit statements to participant	Up to $11/employee	Up to $28/employee
Failure to provide blackout notices	Up to $100/day	Up to $131/day
Failure to notify participants of certain benefit restrictions   and/or limitations arising under Internal Revenue Code   when Plan is underfunded	Up to $1,000/day	Up to $1,632/day
Failure to furnish information requested by Secretary of Labor	Up to $110/day   not to exceed   $1,100/request	Up to $147/day   not to exceed   $1,472/request
Failure by an employer to inform employees of CHIP coverage   opportunities – each employee a separate violation	Up to $100/day	Up to $110/day
Failure by a plan administrator to timely provide to any State   the information required to be disclosed regarding coverage   coordination – each participant/beneficiary a separate violation	Up to $100/day	Up to $110/day
Cap on unintentional failures to meet genetic information   requirements	$500,000 max.	$549,095 max.
Failure to provide Summary of Benefits Coverage under the   Health Care Reform requirements	Up to $1,000/failure	Up to $1,087/failure