MEWA Penalties


Reference

Overview

MEWA Fiduciaries

ERISA sets forth standards of fiduciary conduct which apply to persons responsible for the administration and management of a MEWA.Tooltipthat is subject to ERISA

MEWA Reporting

Form M-1 applies specifically to MEWAs and must be filed annually (and upon certain events) with the DOL. In addition to fiduciary and financial information, the M-1 requires information about a MEWA’s compliance with the health coverage mandates in Part 7 of ERISA.TooltipIncluding specific benefit requirements under the Health Insurance Portability and Accountability Act (HIPAA), the Newborns’ and Mothers’ Health Protection Act (Newborn’s Act), the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), the Women’s Health and Cancer Rights Act (WHCRA), the Genetic Information Nondiscrimination Act (GINA), Michelle’s Law, and the Patient Protection and Affordable Care Act (Affordable Care Act)

See the tables below for penalties related to specific Fiduciary and Health Plan compliance failures.

ERISA Criminal Liability and Fiduciary Breach Penalties

2020

For willfull violations of ERISA’s reporting and disclosure requirements

 Up to $100,000 in fines per individual, and possible imprisonment of up to 10 years

For knowingly making false statements or concealing/failing to disclose any fact needed to prepare ERISA reports

 Fines determined under federal sentencing guidelines and possible imprisonment of up to 5 years

For coercive interference with a participant’s rights under an employee benefit plan

 Up to $100,000 in fines, and possible inprisonment

Theft or embezzlement from an employee benefit plan

 Fine determined under federal sentencing guidelines and possible imprisonment of up to 5 years

Breach of Fiduciary Duties under ERISA

 Monetary penalties up to 20% of the recovery amount;

Personally liable to restore any losses to the Plan;

Removal as a fiduciary; or

Criminal prosecution including fines and imprisonment

Health Plan Penalties

2020

2019

2018

CHIPRA

Failure to inform an employee of CHIP coverage opportunities

 Up to $119 per day per employee Up to $117 per day per employee Up to $114 per day per employee

COBRA

Failure to provide compliant COBRA notices

 $100 per day per violation; in addition, ERISA provide notice penalties of up to $110 per day from the date of compliance failure $100 per day per violation; in addition, ERISA provide notice penalties of up to $110 per day from the date of compliance failure $100 per day per violation; in addition, ERISA provide notice penalties of up to $110 per day from the date of compliance failure

DOL

Failure to furnish to the DOL any requested information relating to the employee benefit plan

 Up to $159 per day not to exceed $1,594 per request Up to $156 per day not to exceed $1,566 per request Up to $152 per day not to exceed $1,527 per request

FMLA

Willful failure to post FMLA general notice

 Up to $176 for each separate violation Up to $173 for each separate violation Up to $169 for each separate violation

Form 1095-B

Failure to file a correct information return and failure to provide a correct payee statement

 $270 per return/statement with a max penalty of $3,275,500 per year $270 per return/statement with a max penalty of $3,218,500 per year $260 per return/statement with a max penalty of $3,193,000 per year

Form 1095-C

Failure to file a correct information return and failure to provide a correct payee statement

 $270 per return/statement with a max penalty of $3,339,000 per year $270 per return/statement with a max penalty of $3,275,500 per year $270 per return/statement with a max penalty of $3,218,500 per year

Form 5500

DOL penalties for failure or refusal to file annual report (i.e., Form 5500)

 Up to $2,233 per day that the filing is late Up to $2,194 per day that the filing is late Up to $2,140 per day that the filing is late

GINA

Failure to any plan sponsor of a group health plan that fails to meet requirements with respect to genetic information

 $119 per day per employee $117 per day per employee $114 per day per employee

Form M-1

Failure of MEWA to file Form M-1

 Up to $1,625 per day for each failure Up to $1,597 per day for each failure Up to $1,558 per day for each failure

SBC

Failure to furnish required documents to a requesting participant, such as an SBC

 Up to $1,176 per failure Up to $1,156 per failure Up to $1,128 per failure

SPD and SAR

Failure to provide an SPD, SAR, or plan document within 30 days of receiving a request from a plan participant or beneficiary

 $110 per day per employee $110 per day per employee $100 per day per employee