On June 30, the Department of Labor (“DOL”) published an interim final rule to adjust the civil monetary penalties on employer-sponsored plans.  The DOL published the interim final rule in accordance with the Federal Civil Monetary Penalties Inflation Adjustment Improvements Act of 2015, which amended the Inflation Adjustment Act.  While the interim final rule adjusts many penalties (see the full list here), we are listing only those that have an affect on health plans.  They are as follows:

ERISA Penalty Statute Description of ERISA Violations Subject to Penalty Current Penalty Amount New Penalty Amount
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 reports.

 Up to $1,100 per day Up to $2,063 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)(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 § 715 Failure to provide Summary of Benefits Coverage under Public Health Services Act section 2715(f), as incorporated into ERISA § 715 and 29 CFR 2590.715-2715(e) Up to $1,000 per failure Up to $1,087 per failure

In addition, the DOL issued a fact sheet and an FAQ further explaining the adjustments.  While these changes increase the penalties on a wide variety of violations, it is worth noting that the maximum penalty is not always imposed for a violation.

Beginning in 2017, future adjustments may be made annually and will have to be made by January 15 of such year.

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