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An Update on Employee Benefit Penalties & Enforcement

Can you believe we’re already halfway through Q1? Last month the Employee Benefits Security Administration (EBSA) released monetary recovery statistics for the 2022 fiscal year, and it’s been a busy year for them! See a summary in the table below.

Total Recoveries

Monetary Benefit Recoveries from Informal Complaint Resolution

Civil Investigations Closed with Results

Criminal Investigations: Individuals with Guilty Pleas or Convictions

Number of Individuals Indicted

$1.4 Billion

$422.1 Million




Total recoveries went down from $1.9 billion last year. Civil investigations, however, are going down, which shows us that what EBSA is doing is working and that when it gets to the point of a civil investigation, there will be a penalty to pay.

Criminal investigations more than doubled, and the number of individuals indicted is also trending up (up from 72 in 2021).

Welfare plan penalties

Every year the Department of Labor (DOL) raises welfare plan penalties based on inflation. Last year it increased by 1%, but this year, we’re seeing a 7.75% increase!

Plan Documents & SPDs

  • Most violations - $100 to $110/day per affected participant
  • Failure to provide SPD or SMM when requested by DOL - $184 per day, up to $1,846 maximum per violation

Required Notices

  • SBC - $1,362 per willful failure to provide to participants
  • CHIPRA - $137/day for failure to provide notice
  • COBRA - $100 to $110/day per affected person


  • $137/day per affected person

Form 5500 Reporting

  • Up to $2,586/day per plan for failure to file
  • $110/day per affected person for failure to distribute SAR

§125 Nondiscrimination

  • Potential loss of tax advantages for highly compensated employees

Medicare Secondary Payer (MSP) Rules

  • $10,360 per violation
*Bold numbers are adjusted annually for inflation.

ACA Reporting Penalties

If you classify as an Applicable Large Employer ALE, the IRS will send you a letter of proposed penalties that are really exaggerated if you don’t furnish or file correctly. These penalties will be based on how many W-2s you submitted. Many employers run into the issue of not even realizing they have to file. Then begins the task of responding back and showing reasonable cause, which can be tricky, especially now with the end of “Good Faith.” Below are the penalties employers may face for ACA violations.

Failure to furnish forms to employees:

  • $50 per form if provided up to 30 days late
  • $110 per form if provided from 31 days late through August 1
  • $290 per form if not provided by August 1

Failure to file forms with the IRS:

  • $50 per form if filed up to 30 days late
  • $110 per form if filed from 31 days late through August 1
  • $290 per form if not filed by August 1

Both penalties increase to $580 per form if the failure was caused by “intentional disregard” (criminal penalties may also apply)

*Bold numbers are adjusted annually for inflation.

Stay on top of your clients because these compliance rules can get quite confusing. Do not avoid these employee benefit laws as EBSA continues to crack down on these violations. The experts at Medcom Benefit Solutions can help your clients stay compliant. We offer a variety of solutions, from ACA Reporting to Health & Welfare solutions, actuarial services, HIPAA training, COBRA administration, and consumer-driven health plans.

Contact us for more info.