DOL Releases Benefit-related Penalty Amounts for 202

On Jan. 11, 2024, the U.S. Department of Labor (DOL) published the 2024 inflation-adjusted civil monetary penalties that may be assessed for a wide range of employee benefit-related violations.

Background

To advance the effectiveness of civil money penalties and strengthen their deterrent effect, federal law requires agencies across the federal government to adjust their penalties for inflation no later than Jan. 15 of each year. Last year, the DOL’s final rule on 2023 inflation-adjusted amounts was published on Jan. 13, 2023.

Penalty Amounts

Violations concerning the following have penalty increases that may affect employers and employee benefit plan administrators:

• Summary of Benefits and Coverage (SBC): Failure to provide group health plan participants and beneficiaries with an SBC may now result in a penalty of up to $1,406 per participant or beneficiary. This increased from $1,362 for 2023 violations.
• Form 5500 filings: Failure to file an annual Form 5500 with the DOL can now result in a penalty of up to $2,670 per day, an increase from $2,586 per day for 2023 violations.
• Multiple Employer Welfare Arrangement (MEWA) filings: Failure of a MEWA to file an annual report (Form M-1) with the DOL can now result in a penalty of up to $1,942 per day. This increased from $1,881 per day for 2023 violations.
• Failure to furnish DOL-requested plan information: Failure to provide plan-related information requested by the DOL can now result in penalties of up to $190 per day but not to exceed $1,906 per request. Compared to the 2023 penalty, this increased from $184 per day but not to exceed $1,846 per request.
• Children’s Health Insurance Program (CHIP) notice: Failure to provide the annual notice regarding CHIP coverage opportunities may now result in a penalty of up to $141 per day (each employee is a separate violation). This increased from $137 per day for 2023 violations.
• 401(k) disclosures: Failure to provide blackout notices and notice of the right to divest employer securities may now result in penalties of up to $169 per day. This increased from $164 per day for 2023 violations.

Action Steps

Employers should become familiar with the new penalty amounts and review their benefit plan administration protocols to ensure full compliance. 

This Legal Update is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.©2024 Zywave, Inc. All rights reserved.