The Department of Labor (DOL) has announced its annual adjustments for 2024, which include increased penalties applicable to employee benefit plans. These changes underscore the importance of compliance for employers in the realm of health and welfare plans governed by the Employee Retirement Income Security Act (ERISA). Let’s break down these adjustments and understand what they mean for employers.

Understanding the Penalty Adjustments

The adjustments for 2024 reflect an upward revision in penalties across various compliance areas. Below is a summary of the key changes:

1. Failure to File Form 5500: The penalty for not filing the Form 5500, which is required for most ERISA plans, has been increased from up to $2,586 per day to up to $2,670 per day.
2. MEWA Reporting Failures: For Multiple Employer Welfare Arrangements (MEWAs) failing to file required reports (M-1 forms), the penalty has been raised from up to $1,881 per day to up to $1,942 per day.
3. CHIP Notice Failures: The penalty for failing to provide the Children’s Health Insurance Program (CHIP) Notice has increased from up to $137 per day per employee to up to $141 per day per employee.
4. CHIP/Medicaid Coordination Disclosure: Failure to disclose CHIP/Medicaid coordination to the state remains at $141 per day per violation.
5. Summary of Benefits and Coverage (SBC): The penalty for failing to provide SBCs is up from $1,362 per failure to $1,406 per failure.
6. Failure to Furnish Plan Documents: For not providing plan documents (including Summary Plan Descriptions (SPDs) and Summary of Material Modifications (SMMs)) to the DOL upon request, the penalty is now $190 per day (up from $184), with a cap per request increasing from $1,846 to $1,906.
7. Genetic Information Failures: The daily penalty for genetic information failures has increased slightly from $137 to $141 per participant or beneficiary.
8. De Minimis Failures in Genetic Information Requirements: The minimum penalty has gone up from $3,439 to $3,550.
9. Non-De Minimis Genetic Information Failures: For more significant failures in meeting genetic information requirements, the minimum penalty has risen from $20,641 to $21,310.
10. Cap on Unintentional Failures in Genetic Information Requirements: The maximum cap for unintentional failures is now $710,310, up from $688,012.

Employer Action Required

In light of these adjustments, it is crucial for private employers, including non-profits, to ensure that they are in full compliance with ERISA requirements. Key actions include:

• Timely Notice Distribution: Employers must distribute required notices (SBC, CHIP, SPD, etc.) in a timely manner to avoid civil penalties.
• Form 5500 Filing: It’s essential to file Form 5500 accurately and on time, where applicable.
• Responding to EBSA Requests: Employers should promptly provide any documents requested by the Employee Benefits Security Administration (EBSA).

Conclusion

The DOL’s increased penalties for 2024 serve as a reminder of the importance of adhering to compliance requirements in managing employee benefit plans. Employers must stay vigilant in their compliance efforts to avoid these heightened penalties. It’s not just about avoiding fines; it’s about maintaining the integrity of employee benefit plans and protecting the rights and benefits of employees. As always, it is advisable for employers to consult with legal or HR professionals to ensure they are up-to-date with all ERISA requirements and changes.