On January 12, 2023, the Department of Labor (DOL) issued Final Regulations that contain inflation adjustments to civil monetary penalties, which the DOL administers. These adjustments are required under the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. This Act significantly revised the method the DOL used in calculating inflation adjustments for penalty increases by:
- Providing an initial “catch-up” adjustment in 2016 for civil monetary penalties.
- Requiring the DOL and other federal agencies to annually adjust the penalties for inflation (using cost-of-living formula) by January 15 of each calendar year.
The below table reflects the DOL’s 2023 annual inflation adjustments to the civil money penalties for violations of certain requirements (Health & Welfare) under ERISA, effective January 15, 2023. This is not a complete list of all penalties and all agencies’ increased penalties. Please refer to 88 Fed. Reg. 2210 (January 13, 2023) to review all increased penalties.
ERISA Penalty Statute | Description of ERISA Violations | Effective January 15, 2023 |
|---|---|---|
ERISA § 502(c)(2) | Failure or refusal to file annual report (Form 5500) | $2,586/day |
ERISA § 502(c)(6) | Failure to furnish information requested:
by employee:
by (DOL): | $110/day $184/day $1,846/request |
ERISA § 502(c)(9)(A) | Failure to inform employees of CHIP coverage opportunities | $137/day per employee |
ERISA § 715 | Failure to provide Summary of Benefits Coverage under Public Health Services Act section 2715(f) | $1,362/failure |
Section 502(c)(4) | Failure to disclose certain documents requested under ERISA 101(k) and (l); failure to furnish notices under 101(j) and 514€(3) | $2046/day per recipient |
The DOL has adjusted the civil monetary penalties eight times since the Interim Final Rule was issued on June 30, 2016.
Employers that are in compliance with the ERISA regulations will have little to no concern that these fees continue to increase annually. Employers that are out of compliance with ERISA requirements could find themselves owing thousands or hundreds of thousands of dollars to the government for violations if audited. Most employers are not aware they are out of compliance with ERISA.
TASC has our clients covered with a liability protection package unique to our industry, a $1M Hold Harmless agreement that insures our clients and provides peace of mind when utilizing our Compliance and Continuation service offerings.
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