DOL Announces 2023 Penalties for Benefit Plan Compliance Errors

Since 2015, federal agencies have been required to annually review the laws and regulations they enforce to adjust applicable penalties for inflation. These adjustments, or so the theory goes, provide higher incentives for plan sponsors to ensure their benefit plans and programs remain compliant. Specifically, the U.S. Department of Labor (DOL) must adjust penalties under the Employee Retirement Income Security Act (ERISA) annually. The DOL recently issued its annual adjusted amounts for penalties assessed after January 15, 2023, for violations that occur after November 2, 2015.

Action Steps

To avoid penalties, employers should review their health plans to ensure compliance with ERISA’s requirements. Specifically, employers should ensure they are complying with ERISA’s reporting and disclosure rules, including Form 5500, annual CHIP notice, and SBC requirements.

Adjustments for 2023

Failure or refusal to file an annual report (Form 5500) with the DOL (unless a filing exemption applies)

• 2022 Penalty: Up to $2,400/day
• 2023 Penalty: Up to $2,586/day

Failure of a multiple employer welfare arrangement (MEWA) to file an annual report (Form M-1) with the DOL

• 2022 Penalty: Up to $1,746/day
• 2023 Penalty: Up to $1,881/day

Failure to furnish plan-related information requested by the DOL

• 2022 Penalty: Up to $171/day, not to exceed $1,713/request
• 2023 Penalty: Up to $184/day, not to exceed $1,846/request

Failure to provide the annual notice regarding Children's Health Insurance Program (CHIP) coverage opportunities (applies to employers with group health plans that cover residents of states that provide a premium assistance subsidy under CHIP)

• 2022 Penalty: Up to $127/day/failure
  (each employee is a separate violation)
• 2023 Penalty: Up to $137/day/failure
  (each employee is a separate violation)

Failure to timely disclose information to a state regarding group health plan coverage for an individual who is covered under a Medicaid or CHIP plan

• 2022 Penalty: Up to $127/day
  (each participant or beneficiary is a separate violation)
• 2023 Penalty: Up to $137/day
  (each participant or beneficiary is a separate violation)

Failure by any health plan sponsor (or any health insurance issuer offering health insurance coverage in connection with the plan) to comply with requirements of the Genetic Information Nondiscrimination Act (GINA) for health plans

• 2022 Penalty:
  • $127/day/participant or beneficiary during noncompliance period
  • Minimum of $3,192/participant or beneficiary for de minimis failures not corrected prior to notice from the DOL
  • Minimum of $19,157/participant or beneficiary for failures not corrected prior to notice from the DOL that are not de minimis
  • Maximum of $638,556 for unintentional failures
• 2023 Penalty:
  • $137/day/participant or beneficiary during noncompliance period
  • Minimum of $3,439/participant or beneficiary for de minimis failures not corrected prior to notice from the DOL
  • Minimum of $20,641/participant or beneficiary for failures not corrected prior to notice from the DOL that are not de minimis
  • Maximum of $688,012 for unintentional failures

Failure to provide Summary of Benefits and Coverage (SBC)

• 2022 Penalty: Up to $1,264 per failure to provide the SBC
• 2023 Penalty: Up to $1,362 per failure to provide the SBC