It’s no wonder employers are ditching their health plans in favor of ICHRAs! They want out of the health insurance business and news like this adds urgency to their angst…………
DOL sets 2025 penalties for health and welfare benefit plan violations
SOURCE: Mercer
January 10, 2025
Employers violating Department of Labor (DOL) regulations — including employee benefit, wage and hour, mine safety, occupational safety and health, and workers’ compensation rules — could face stiffer penalties in 2025, due to new inflation adjustments. The higher rates apply to penalties assessed after Jan. 15, 2025, for violations occurring after Nov. 2, 2015. DOL rarely assesses the maximum and often waives penalties entirely for failures due to reasonable cause. But the penalty threat is an important enforcement and deterrent tool.
2025 adjustments for health and welfare benefits
The year-over-year inflation increase for 2025 is 2.598%. Annual inflation adjustments are based on the percent change between the October Consumer Price Index for All Urban Consumers (CPI–U) before the adjustment date and the prior year’s October CPI–U. In this case, the adjustment reflects the percent change in the October CPI–U from 2023 to 2024. The following chart shows the 2025 and 2024 maximum (and in some cases, minimum) penalties for certain health and welfare plan violations assessed after Jan. 15.
| Type of health or welfare benefit plan failure | Maximum penalty (unless otherwise indicated) | |
|---|---|---|
| 2025 (after Jan. 15) | 2024 (after Jan. 15) | |
| Failure to file Form 5500 | $2,739/day late | $2,670/day late |
| Failure to file a multiple employer welfare arrangement (MEWA) annual report (Form M-1) | $1,992/day late | $1,942/day late |
| Failure to provide plan documents to DOL within 30 days after request | $195/day late, capped at $1,956/request | $190/day late, capped at $1,906/request |
| Failure to inform an employee about Children’s Health Insurance Program (CHIP) coverage opportunities (each employee is a separate violation) | $145/day late | $141/day late |
| Failure to timely provide to any state information about coverage coordination with Medicaid or CHIP (each participant or beneficiary is a separate violation) | $145/day late | $141/day late |
| Failure to meet genetic information restrictions (on discriminating in eligibility, coverage or premiums; requesting or requiring genetic tests; collecting genetic information; etc.) | $145/day of noncompliance | $141/day of noncompliance |
| Minimum penalty for de minimis failure not corrected before notice from DOL | $3,642 | $3,550 |
| Minimum penalty for non-de minimis failure not corrected before notice from DOL | $21,864 | $21,310 |
| Cap on penalties for unintentional failures | $728,764 | $710,310 |
| Failure to provide summary of benefits and coverage (SBC) with uniform glossary | $1,443 per failure | $1,406 per failure |
Related resources
Non-Mercer resources
- Federal civil penalties inflation adjustment act annual adjustments for 2025 (Federal Register, Jan. 10, 2025)
Mercer Law & Policy resources
- HHS adjusts 2024 HIPAA, certain ACA and MSP monetary penalties (Aug. 21, 2024)
- DOL sets 2024 penalties for health and welfare benefit plan violations (Jan. 11, 2024)
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