DOL Announces Annual Adjustments to Many Employee Benefit Plan Penalties

January 5, 2018


Who does this apply to?
Employers who offer benefit plans to their employees.

What action must I take? 
There is no immediate employer action required, other than to note the increased penalty amounts for non-compliance with various employee benefit regulations.

In 2015, legislation was enacted by Congress that required an initial "catch-up" adjustment to specified penalty amounts, followed by annual adjustments. Regulations were then issued in 2016 that established catch-up amounts and required future adjustments be made by January 15 of each year, starting in 2017. The 2018 adjustments are effective for penalties assessed after January 2, 2018, with respect to violations occurring after November 2, 2015.

Highlights of Changes

  • Form 5500 – The maximum penalty for failing to file Form 5500 increases from $2,097 to $2,140 per day that the form is late.
  • Group Health Plans – The maximum penalty for failing to provide the summary of benefits and coverage (SBC) increases from $1,105 to $1,128 per failure. The penalty for violations of the Genetic Information Nondiscrimination Act (GINA) increases from $112 to $114 per participant per day. 
  • 401(k) Plans – For plans with automatic contribution arrangements, the penalty for failing to provide the ERISA § 514(e) preemption notice to participants increases from $1,659 to $1,693 per day. The penalty for failing to provide blackout notices or notices of diversification rights increases from $133 to $136 per day. The maximum penalty for failing to comply with the ERISA § 209(b) recordkeeping and reporting requirements increases from $28 to $29 per employee.

The team at Vita is dedicated to keeping your benefit plans fully compliant, so while knowing these penalties is important, we expect that you will never actually experience them.



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