Federal regulations require the U.S. Department of Labor (DOL) to make inflationary adjustments to its civil monetary penalties by Jan. 15 of each year. Accordingly, on Jan. 15, 2023 the DOL issued the 2023 annual adjustments connected to a variety of group benefit-related compliance failures. The 2023 adjusted penalty levels apply to any civil penalties assessed after Jan. 15, 2023 for violations occurring after Nov. 2, 2015. Penalties are assessed by the Employee Benefits Security Administration (EBSA), the ERISA enforcement division of the DOL. While the DOL tends to impose penalty amounts below the maximum level—and even has the discretion to waive the penalties entirely in response to good faith correction efforts—plan sponsors are encouraged to remain aware of the potential consequences of compliance failures.

Below are some of the newly adjusted penalties relevant to health and welfare plan violations:

• Form 5500: Failure to timely file annual Form 5500 report subjects a plan sponsor to an increased penalty of $2,586 per day (previously $2,400), starting on the date of the failure.

• Summary of Benefits and Coverage (SBC): The maximum penalty for failing to provide a compliant SBC on a timely basis increased from $1,264 to $1,362 per failure.

• Plan documentation requested by the DOL: Potential penalties for failure to provide plan information, such as a plan document or summary plan description (SPD), to the DOL within 30 days upon request increased to $184 per day, with a maximum penalty of $1,846 per occurrence (previously $171 per day with a $1,713 maximum penalty).

• Children’s Health Insurance Program (CHIP) Notice: Failure to provide each employee with notice related to state-provided premium assistance (commonly referred to as a Medicaid/CHIP notice or CHIPRA notice) subjects a plan sponsor to a penalty of $137 per day per employee, which is a $10 per day increase from 2022.

• Medicaid and CHIP Disclosure to states: Employers must, upon request, provide disclosure of group health plan benefits to states for Medicaid/CHIP eligible individuals. The penalty for failure to provide that disclosure increased to $137 per day per employee, another $10 per day increase from 2022.

• Multiple Employer Welfare Arrangement (MEWA) Filing: Penalties for failure to meet applicable filing requirements, which include annual Form M-1 filings and filings upon origination, increased to $1,881 per day, a $135 per day escalation.

• Violations of the Genetic Information Nondiscrimination Act (GINA): Violations of GINA, such as establishing eligibility rules based on genetic information or requesting genetic information for underwriting purposes, may result in penalties of $137 per participant per day, up from $127 per day.

The full text of the Federal Register containing these updated amounts is available here.