Department of Labor Releases 2020 Adjusted Penalty Amounts

The Department of Health and Human Services (HHS) and the Department of Labor (DOL) have issued adjusted/updated civil monetary penalties for a myriad of benefits related violations. The Departments are required by law to provide their annual adjustments by January 15th each year. The 2020 penalties will not be assessed until after January 15, 2020 regarding violations occurring after November 2, 2015.

Form 5500 – The maximum penalty for failing to file Form 5500 (which is an annual filing required of most ERISA plans) has increased from $2,194 to $2,233 per day that the filing is late;
Summary of Benefits and Coverage (SBC) – The maximum penalty for failing to provide the SBC increases from $1,156 to $1,176 per failure;
Children’s Health Insurance Program (CHIP) – The maximum penalty for failing to disclose the availability of Medicaid/children’s health insurance program assistance increases from $117 to $119 per participant per day;
Genetic Information Nondiscrimination Act (GINA) – The maximum penalty for violating the GINA regulations, such as establishing eligibility rules based on genetic information or requesting genetic information for underwriting purposes increases from $117 to $119 per participant per day;
Medicare Secondary Payer (MSP) – MSP statute prohibits a group health plan from coercing, inducing, or incentivizing employees, their spouses, or dependents to elect Medicare over employer-sponsored coverage, as well as requires specific reporting and prohibits group health plans from “taking into account” the Medicare status of one of its active employees and their dependents when making health plan decisions. The maximum penalty for violating MSP rules has increased:
- Penalty for offering incentives to Medicare-eligible individuals to not enroll in the group health plan has increased from $9, 472 to $9,639 per offer;
- Penalty for willful or repeated failure to provide requested information regarding the group health plan to an active Medicare-eligible employee has increased from $1,542 to $1,569 for each day of non-compliance;
- Penalty for failing to provide information identifying situations where the group health plan is primary has increased from $1,211 to $1,232 for each day of non-compliance.
The Health Insurance Portability and Accountability Ace (HIPAA) Violations – HIPAA requires the protection and confidential handling of protected health information. The Act provides for penalty “tiers” depending upon the violation:
- Penalty for a Tier 1 (lack of knowledge – The person didn’t know and wouldn’t have known of the violation even if they had exercised reasonability diligence) violation increases from a minimum of $117 to $119 per violation to a maximum of $59,552 and a calendar-year cap of $1,785,651;
- Penalty for a Tier 2 (reasonable cause – The person violated HIPAA due to reasonable cause, not willful neglect) violation increases from a minimum of $1,170 to $1,191 per violation to a maximum of $59,522 and a calendar-year cap of $1,785,651;
- Penalty for a Tier 3 (willful neglect, corrected – The person’s violation resulted from willful neglect that was corrected within 30 days) violation increases from a minimum $11,698 to $11,904 per violation with a maximum of $59,522 and a calendar-year cap of $1,785,651;
- Penalty for a Tier 4 (willful neglect, not corrected – The violation resulted from willful neglect and wasn’t corrected in a timely fashion) violation increases from a minimum of $58,490 to $59,522 per violation with a maximum of $1,785,651 and a calendar-year cap of $1,785,651.