The Department of Labor (DOL), Department of Health & Human Services (HHS) and the Internal Revenue Service (IRS) have issued adjusted penalty amounts for employers audited in 2020 as follows:
THE DEPARTMENT OF LABOR (DOL)
Legislation enacted in 2015 requires annual adjustments to certain penalty amounts by January 15th each year. The 2020 adjustments are below and effective for penalties assessed after January 15, 2020, with respect to violations occurring after November 2, 2015:
- Summary of Benefits and Coverage (SBC)– Failure to provide the SBC is increased from $1,156 to $1,176 for each failure
- Employer CHIP Notice– Failure to provide a CHIP Notice to employees in states that offer group health plan premium assistance through a state Children’s Health Insurance Program will now result in a penalty of up to $119 per day per employee, up from $117.
- Summary Plan Description (SPD)– Failure to furnish an SPD to the DOL upon request may now result in a penalty of up to $159 per day (up from $156) not to exceed $1,594 per request (up from $1,566).
- Form 5500– Failing to file Form 5500 increases from $2,194 to $2,233 per day that the filing is late. Relief may be available under the DOL’s Delinquent Voluntary Compliance Program.
- Genetic Information Nondiscrimination Act (GINA)
- Minimum penalty for de minimisfailures to meet genetic information requirements not corrected prior to notice from the Secretary of Labor is $2,970 up from $2,919.
- Minimum penalty for failures to meet genetic information requirements which are not corrected prior to notice from the Secretary of Labor and are more than de minimis. $17,824 up from $17,515
- Cap on penalty for unintentional failures to meet genetic information requirements is a maximum penalty of $594,129 up from $583,830.
THE DEPARTMENT OF HEALTH & HUMAN SERVICES (HHS)
HIPAA encompasses standards for privacy, security, breach notification, and electronic health care transactions. The indexed penalty amounts for each violation of a HIPAA administrative simplification provision below are effective for penalties assessed on or after January 17, 2020, for violations occurring on or after November 2, 2015.
| Tier 1 – Lack of knowledge | 2020 | 2019 |
| Min. Penalty Max. Penalty Calendar-year Cap |
$119 $59,522 $1,785,651 |
$117 $58,490 $1,754,698 |
| Tier 2 – Reasonable cause and not willful neglect | 2020 | 2019 |
| Min. Penalty Max. Penalty Calendar-year Cap |
$1,191 $59,522 $1,785,651 |
$1,170 $58,490 $1,754,698 |
| Tier 3 – Willful neglect, corrected within 30 days | 2020 | 2019 |
| Min. Penalty Max. Penalty Calendar-year Cap |
$11,904 $59, 522 $1,785,651 |
$11,698 $58,490 $1,754,698 |
| Tier 4 – Willful neglect, not corrected within 30 days | 2020 | 2019 |
| Min. Penalty Max. Penalty Calendar-year Cap |
$59,522 $1,785,651 $1,785,651 |
$58,490 $1,754,698 $1,754,698 |
| Medicare Secondary Payer | 2020 | 2019 |
| Penalty for offering incentives to Medicare-eligible individuals not to enroll in a plan that would otherwise be primary | $9,639 | $9,472 |
| Penalty for willful or repeated failure to provide requested information regarding group health plan coverage | $1,569 | $1,542 |
| Penalty for responsible reporting entities that fail to provide information identifying situations where the group health plan is primary | $1,232 | $1,211 |
THE INTERNAL REVENUE SERVICE (IRS)
Effective January 1, 2020, The IRS can assess a penalty for late filers of Form 5500 of up to $250/day, up from $25/day, to a maximum of $150,000 per plan year, up from $15,000 per plan year. Relief may be available under the DOL’s Delinquent Voluntary Compliance Program.
See: Department of Labor Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2020and Consolidated Appropriations Act 2020 (SECURE Act) for more information.
Princeton HR Solutions, LLC provides a variety of solutions to help protect employers with regard to the above compliance and communication requirements. Please contact us if you would like more information.