That’s a Bigger Penalty Than Expected! ERISA Penalties for Disclosure Failures

ERISA sets forth many disclosure requirements for plan sponsors and administrators to furnish certain benefit plan-related documents to participants to apprise them of their rights, benefits, and obligations under their plans. A civil penalty remedy structure is available to the intended disclosure recipients when a plan fails to meet these obligations. For plan sponsors, the penalty amounts can be substantial as they may be multiplied by the number of disclosure omissions. For example, the penalty for failing to provide health plan participants with a Summary of Benefits Coverage is $1,443, per failure. The specter of these large amounts heightens the importance of verifying that a disclosure process is established and satisfied.

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