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2025 Adjusted Penalty Amounts Released
The Department of Labor (DOL) issued the 2025 annual adjustments to penalties applicable to group health plan benefits. The 2025 amounts are effective for penalties assessed after January 15, 2025 for violations occurring after November 2, 2015.
WHO THIS APPLIES TO:
- All employers with a fully insured, level-funded, or self-funded group medical plan or an ICHRA.
- All employers with ERISA health or welfare plans subject to the jurisdiction of the DOL.
Following are the revised penalties for 2025 applicable to health benefit plans:
| Penalty Type | 2024 Amount | 2025 Amount |
|---|---|---|
| Form 5500 per day late | $2,670 | $2,739 |
| Form M-1 per day late | $1,942 | $1,992 |
| Summary of Benefits and Coverage (SBC) per failure | $1,406 | $1,443 |
| GINA Violations per person per day | $141 | $145 |
| Medicaid/CHIP Disclosures per person per day | $141 | $145 |
| DOL Information Request | $190 per day, up to $1,906 per request | $195 per day, up to $1,956 per request |
Employers sponsoring group benefits need to be aware of potential penalties for various failures and make necessary changes to avoid such penalties.
Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2025:
🔗 https://www.federalregister.gov/d/2024-31602
🔗 https://www.federalregister.gov/documents/2025/01/10/2024-31602/federal-civil-penalties-inflation-adjustment-act-annual-adjustments-for-2025
2025 Federal Poverty Level Increased, Affecting FPL Affordability Safe Harbor
Updated guidelines set the 2025 FPL at $15,650 (up from $15,060 in 2024) for a person living in the mainland US, $17,990 in Hawaii and $19,550 in Alaska.
WHO THIS APPLIES TO:
- Applicable Large Employers (ALEs) with 50 or more full-time and equivalents (FTEs) with a fully insured, level-funded, or self-funded group medical plan or an ICHRA.
There are three affordability safe harbors an ALE can rely upon to determine whether coverage is “affordable” for an employee:
- Federal Poverty Level (FPL)
- Rate of Pay
- W-2
The FPL safe harbor is the easiest to apply because the employer only has to do one calculation, which does not depend on employees’ actual wages.
The FPL safe harbor states that the lowest-cost single plan providing minimum value (MV) is FPL affordable if the employee’s portion does not exceed 9.02% (for 2025) of whatever FPL is in effect in any of the six months prior to the start of the plan year.
FPL Safe Harbor for 2025:
- Calendar Year 2025 Plan:
- 2024 FPL ($15,060, $17,310 HI, or $18,810 AK) × 9.02% ÷ 12
- = $113.20/month (mainland), $130.11/month (Hawaii), $141.38/month (Alaska)
- Non-Calendar Year 2025 Plan:
- 2025 FPL ($15,650, $17,990 HI, or $19,550 AK) × 9.02% ÷ 12
- = $117.63/month (mainland), $135.22/month (Hawaii), $146.95/month (Alaska)
ALEs who want to ensure affordability year-round can set employee contributions at or below these thresholds.
ACA Reporting (6055 and 6056) Deadlines and New Relief for ALEs
The IRS issued final forms and instructions for ACA reporting requirements (2024 Instructions for Forms 1095/1094-C and 1095/1094-B).
WHO THIS APPLIES TO:
- ALEs with 50 or more FTEs with a fully insured, level-funded, or self-funded group medical plan or an ICHRA.
- Small employers (non-ALEs with fewer than 50 FTEs) with a level-funded group medical plan or an ICHRA.
Key Deadlines for ACA Reporting in 2025:
- Paper filings due to IRS → Friday, February 28, 2025
- Electronic filings due to IRS → Monday, March 31, 2025
- 1095-C and B statements due to individuals → Monday, March 3, 2025
🔗 IRS Form 1095-C Instructions
🔗 IRS Form 1095-B Instructions
Medicare Part D Coverage Disclosures Due January 31 or February 28 for Calendar Year Plans
Any employer sponsoring a group health plan must notify CMS of the plan’s Medicare Part D creditable coverage status.
WHO THIS APPLIES TO:
- All employers with a fully insured, level-funded, or self-funded group medical plan or an ICHRA.
The CMS Disclosure Form must be completed annually within 60 days from the start of the plan year, or within 30 days if creditable status changes for one or more plan options.
- For January 1 plan year start dates:
- Deadline: February 28, 2025 (or January 31, 2025, if changes apply).
🔗 CMS Creditable Coverage Disclosure Form
Final Thoughts for Employers
Employers should stay informed on regulatory changes and penalty adjustments to ensure compliance with ACA, ERISA, and IRS regulations.
- Employers should:
- Regularly check DOL, IRS, and CMS guidance.
- Ensure timely ACA reporting and Medicare Part D notifications.
- Verify group health plan affordability and penalty thresholds for 2025.