I’ve always admired the modesty of regulatory agencies and their polite expression of force. You might be pleased to learn that the Department of Labor (DOL) just issued interim final rules “to adjust the amounts of civil penalties assessed or enforced in its regulations.”
Of course, if you understand official language, you know that the DOL meant to say that it had increased the fines for violations of ERISA. Adjustments must always be upward.
Last November Congress passed the “Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015” [no it’s not my redundancy typo] which required “adjustments” in civil monetary penalties for violations of federal law. Thoughtfully, the “Act Act” provides for “catch-up” inflationary “adjustment” (increase) of up to 150% of the November 2015 penalty. Then DOL may annually “adjust” fines based upon the Consumer Price Index for Urban Consumers.
For employers who fail to file a Form 5500 or a Multiple Employer Welfare Arrangement that fails to file the required M-1, the fines nearly double. For employers who fail to provide required beneficiary notices and plan documents the fines increase more modestly from, for example, $100 per day to $110 per day for a failure to comply with ERISA restrictions on the use of genetic information. For employers participating in association health plans, make sure you understand who is responsible for what in meeting ERISA requirements.
Here is the published ERISA penalty chart. Enjoy your summer reading.
“The table below shows the current penalty amounts enforceable by EBSA and the inflation adjusted penalty that will go into effect for penalties assessed after August 1, 2016.”
| ERISA Penalty Statute | Description of ERISA Violations Subject to Penalty | Current Penalty Amount | New Penalty Amount |
| ERISA § 209(b) | Failure to furnish reports (e.g., pension benefit statements) to certain former participants and beneficiaries or maintain records. | Up to $11 per employee | Up to $28 per employee |
| ERISA § 502(c)(2) | • Failure or refusal to file annual report (Form 5500) required by ERISA § 104; and • Failure of a multiemployer plan to certify endangered or critical status under ERISA § 305(b)(3)(C) treated as failure to file annual report. | Up to $1,100 per day | Up to $2,063 per day |
| ERISA § 502(c)(4) | • Failure to notify participants under ERISA § 101(j) of certain benefit restrictions and/or limitations arising under Internal Revenue Code § 436; • Failure to furnish certain multiemployer plan financial and actuarial reports upon request under ERISA § 101(k); • Failure to furnish automatic contribution arrangement notice under ERISA § 514(e)(3). | Up to $1,000 per day | Up to $1,632 per day |
| ERISA § 502(c)(5) | 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 | Up to $147 per day not to |
| exceed $1,100 per request | exceed $1,472 per request | ||
| ERISA § 502(c)(7) | Failure to furnish a blackout notice under section 101(i) of ERISA or notice of the right to divest employer securities under section 101(m) of ERISA. | Up to $100 per day | Up to $131 per day |
| ERISA § 502(c)(8) | Failure by a plan sponsor of a multiemployer plan in endangered status to adopt a funding improvement plan or a multiemployer plan in critical status to adopt a rehabilitation plan. Penalty also applies to a plan sponsor of an endangered status plan (other than a seriously endangered plan) that fails to meet its benchmark by the end of the funding improvement period. | Up to $1,100 per day | Up to $1,296 per day |
| ERISA § 502(c)(9)(A) | 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) | 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) | 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) | 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) | 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). | Cap on unintentional failures to meet genetic information requirements. | $500,000 maximum | $549,095 maximum |
| ERISA § 502(c)(12) | Failure of CSEC plan sponsor to establish or update a funding restoration plan. | Up to $100 per day | Up to $100 per day |
| ERISA § 502(m) | Distribution prohibited by ERISA § 206(e) of ERISA. | Up to $10,000 per distribution | Up to $15,909 per distribution |
| ERISA § 715 | 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 |
