The Employee Benefit Security Administration (EBSA) is responsible for enforcing the ERISA. This is a law that sets the minimum standards for a significant number of pension and health plans in the private industry. The law was put in place to protect individuals that are benefiting from these employee benefit plans.

In the beginning of 2018, the Department of Labor issued a rule to elevate the civil monetary penalties for the violations of the Employee Retirement Income Security Act (ERISA). This was to ensure that businesses make sure ERISA compliance is a priority for them. In addition, the increase in penalties take into consideration annual inflation.

What it means to be ERISA Compliant

All companies, especially private companies, proprietorships and even partnerships have a responsibility to be ERISA compliant. ERISA compliance means that a company needs to adhere to ERISA regulations which have put in place the minimum standards for retirement plans within the private sector. For those who do not follow ERISA requirements for their employees, here are the highlights of what they may face:

• Form 5500 must be filed, and companies that fail to do so could receive the maximum penalty of $2,097 this has risen to $2,140 per day.
• Group health plans has a maximum penalty for not providing the summary of benefits and coverage. These are necessary under the health care reform. Each time one fails, the penalty rises from $1,105 to $1,128. This means that one needs to be very clear about their employee health plan.
• There has also been an increase in the multiple employer welfare arrangements (MEWAs). Here, the penalty has risen from $1,527 t0 $1,558 per day. This penalty comes in place if there is a failure to meet applicable filing requirements, and these include annual Form M-1 fillings, as well as filings upon origination.
• It is also important for businesses to provide the required ERISA preemption notice to their employees. This applies to those who have plans with automatic contribution arrangements, such as the 401k plans. The penalty has gone up from $1,659 to $1,693 per day.
• The big penalty to watch out for is under the Genetic Information Non-Disclosure Act (GINA), particularly a cap on unintentional failures to meet genetic information requirements. This has risen from a maximum penalty of $558,078 to $569,468.

All employers need to be fully aware of the ERISA requirements for employee benefit plan. Not being clear about these means that one will have to face penalties which can be fully prevented, saving any business considerable costs. In fact, it is expected that the increase in costs will actually motivate or offer stronger incentives to businesses to focus on being compliant, and specifically keeping to the deadlines. To read all of the regulations, it is best to visit the site of the Department of Labor. When on the site, go through the Department of Labor Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2018.