Every federal benefits penalty, on one page.
The penalties that attach to an employer’s benefit plans are spread across three federal agencies and a dozen statutes, and most of them are counted per day, per person. This is the list in one place: what each failure costs in 2026, who owes it, and how the fix usually works, with a link to our deeper page wherever there is one.
One note on the numbers. The Department of Labor did not adjust its civil penalties for inflation in 2026: the fall 2025 federal shutdown stopped the Bureau of Labor Statistics from publishing the October inflation figure the adjustment depends on, so the Labor Department amounts below are the 2025 figures, still in force. HHS adjusted its penalties in January 2026, and the IRS amounts follow their own indexing.
The disclosure and filing penalties.
Assessed by the Department of Labor or awarded by a court. Most run per day from the missed deadline or the unanswered request.
| Failure | Penalty in 2026 | Where It Comes From |
|---|---|---|
| Form 5500 not filed, or filed late | Up to $2,739 a day, per plan, with no cap | ERISA 502(c)(2). The Delinquent Filer Voluntary Compliance Program swaps it for $10 a day, capped — see late ACA and Form 5500 filings. |
| Summary of Benefits and Coverage not provided | Up to $1,443 per failure | PHSA 2715 and ERISA 715. Each person who should have received one is a separate failure. |
| Medicaid and CHIP premium assistance notice not provided | Up to $145 a day, per employee | ERISA 502(c)(9). Owed to every employee in a state with a premium assistance program. See required employee notices. |
| SPD, plan document or other requested documents not provided within 30 days | Up to $110 a day, awarded by a court | ERISA 502(c)(1). A benefits guide does not count — see why a benefits guide is not an SPD. |
| COBRA election or general notice not provided | Up to $110 a day, per qualified beneficiary | ERISA 502(c)(1), on top of the IRS excise tax below. See COBRA administration. |
| Documents requested by the Labor Department not furnished | Up to $195 a day, capped at $1,956 per request | ERISA 502(c)(6). |
| Form M-1 not filed by a multiple employer welfare arrangement | Up to $1,992 a day | ERISA 502(c)(5). Relevant to association and other multiple-employer health plans. |
| Fiduciary breach | An added 20% of any amount recovered by settlement or court order | ERISA 502(l). See fiduciary governance. |
| Willful reporting and disclosure violations | Criminal: up to $100,000 and 10 years for an individual, up to $500,000 for an entity | ERISA 501. Rare, and reserved for willful conduct. |
What happens when the Labor Department or the IRS opens a file →
The tax penalties, which are the ones that compound.
Two of these are self-reported excise taxes: there is no bill, only an obligation the employer is expected to calculate and report on Form 8928.
| Failure | Penalty in 2026 | Where It Comes From |
|---|---|---|
| ACA employer mandate: no offer of coverage to at least 95% of full-time employees | $3,340 per full-time employee, minus the first 30, for 2026. $3,780 for 2027. | IRC 4980H(a). Triggered when a single full-time employee receives a premium tax credit. See ACA employer penalties explained. |
| ACA employer mandate: coverage offered but unaffordable or below minimum value | $5,010 per full-time employee who receives a premium tax credit, for 2026. $5,670 for 2027. | IRC 4980H(b). Never more than the 4980H(a) amount. See the affordability percentage and how opt-out payments affect it. |
| Forms 1094-C and 1095-C late or incorrect | $60 per return if corrected within 30 days, $130 by August 1, $340 after that. $680 for intentional disregard. | IRC 6721 and 6722, for returns filed in 2026. The IRS copy and the employee copy are separate returns. |
| COBRA failures | $100 a day per qualified beneficiary, $200 a day per family | IRC 4980B excise tax. Federal COBRA applies from 20 employees. The administrator that caused the failure can be liable too. |
| Group health plan mandates: HIPAA portability, mental health parity, GINA, the ACA market reforms, the gag clause rules, the No Surprises Act and price transparency | $100 a day per affected person. At least $2,500, or $15,000 if more than minor, once an IRS exam has started. Capped for unintentional failures at the lesser of 10% of last year’s plan cost or $500,000. | IRC 4980D excise tax. None is owed if the failure was due to reasonable cause and is corrected within 30 days. Insured plans of 2 to 50 employees are exempt for failures caused by the carrier. See the gag clause attestation. |
| PCORI fee filed or paid late | 5% of the unpaid fee a month for late filing, up to 25%, plus 0.5% a month for late payment, plus interest | IRC 6651, on the second-quarter Form 720. See PCORI fees. |
| Cafeteria plan run without a written plan document | Every pre-tax election in the plan becomes taxable | IRC 125. The same doctrine applies to a cash opt-out offered outside the plan. See FSA and HRA administration. |
| Dependent care account fails its nondiscrimination test | Highly compensated employees’ benefits become taxable | IRC 129. More likely now the limit is $7,500 — see dependent care and family support. |
The privacy and Medicare penalties.
HIPAA privacy lands hardest on self-funded plans, which are covered entities in their own right. The Medicare rules apply to fully insured and self-funded plans alike.
| Failure | Penalty in 2026 | Where It Comes From |
|---|---|---|
| HIPAA privacy or security violation by the plan | $145 to $73,011 per violation depending on culpability, up to $2,190,294 a calendar year for uncorrected willful neglect | HHS Office for Civil Rights, amounts adjusted January 2026. A fully insured plan that never touches protected health information carries far less of this. |
| Incentive for a Medicare-entitled employee or spouse to decline the group plan | Up to $11,823 per violation | Medicare Secondary Payer rules, employers with 20 or more employees. See the Medicare rule on opt-out payments. |
| Medicare Secondary Payer reporting not done | Up to $1,512 a day, per individual not reported | Owed by the reporting entity — usually the carrier or third-party administrator, unless the plan is self-administered. |
| Medicare Part D creditable coverage notice missed | No employer fine. The cost lands on the employee: a permanent late-enrollment penalty of 1% of the base premium for every month without creditable coverage. | Still a legal requirement, and the employee relations cost is real. See the two Part D disclosures. |
The HR rules that reach into the benefit plan.
These are employment-law exposures rather than plan penalties, but each one is triggered by a benefits decision.
| Failure | Penalty in 2026 | Where It Comes From |
|---|---|---|
| FMLA poster not displayed | $216 per offense | The only fixed FMLA fine. The real exposure is the one below — see FMLA penalties. |
| FMLA interference or retaliation | Lost wages and benefits, an equal amount again as liquidated damages, interest and attorney fees | Awarded by a court. Doubling is the default the employer has to argue its way out of. |
| Overtime underpaid because a benefit payment was left out of the regular rate | Back wages plus an equal amount as liquidated damages. Up to $2,515 per violation if repeated or willful. | Fair Labor Standards Act. Cash in lieu of benefits is the usual culprit — see cash in lieu of benefits. |
| Marketplace coverage notice not given to a new hire | No penalty is written into the statute | FLSA 18B. Still required within 14 days of the start date, for every employee. See required employee notices. |
The amounts are rarely the whole story.
Three patterns decide what a failure ends up costing, and all three reward finding it first.
Per Day, Per Person
Most of these counters start at the missed deadline and multiply by headcount. A notice that never went out is not one failure; it is one failure for every employee, for every day since. The age of a gap matters more than the gap.
Self-Reported, Not Billed
The COBRA and group health plan excise taxes are owed whether or not anyone asks. An employer that finds a failure and corrects it within 30 days generally owes nothing; the same failure found in an IRS exam carries a minimum of $2,500 per person.
Programs Cap the Fixable Ones
A late Form 5500 filed through the voluntary program costs a few hundred dollars instead of thousands a day. Reasonable cause softens information return penalties. Almost every regime is cheaper before the agency writes than after.
The questions employers ask once they have seen the table.
Ten answers, each short enough to act on.
What is the penalty for not filing Form 5500?
Up to $2,739 a day per plan from the Labor Department, with no cap. Filing late through the Delinquent Filer Voluntary Compliance Program replaces that with $10 a day, capped at $750 per filing for a small plan and $2,000 for a large one.
Do small employers have to worry about these penalties?
Yes. The SPD, SBC, CHIP notice, HIPAA and FMLA poster rules do not depend on size. The employer mandate starts at 50 full-time equivalents, federal COBRA at 20 employees, and the Form 5500 at 100 participants for a fully insured plan.
Who pays the penalty: the employer, the carrier or the broker?
Mostly the employer, as plan sponsor and plan administrator. The carrier shares liability for insured requirements such as the SBC, and a COBRA administrator whose error caused a failure can owe the excise tax too. A broker is not the plan administrator.
Are the penalty amounts the same in 2026 as in 2025?
Most Labor Department amounts are, because inflation adjustments were frozen after the 2025 shutdown delayed the data. HHS raised its HIPAA, SBC and Medicare amounts in January 2026, and the ACA employer mandate amounts are indexed every year.
What are the ACA employer mandate penalties for 2027?
$3,780 per full-time employee, minus the first 30, when coverage is not offered, and $5,670 per full-time employee who receives a premium tax credit when the coverage offered is unaffordable or below minimum value.
Is there a penalty for missing the Medicare Part D notice?
Not for the employer. The cost falls on employees who delay Medicare because they assumed their coverage was creditable: a late-enrollment penalty of 1% of the base premium for every month without it, for as long as they have Part D.
What happens if we find a problem and fix it ourselves?
Usually far less. The COBRA and group health plan excise taxes are generally not owed if the failure was due to reasonable cause and corrected within 30 days, late 5500s can go through the voluntary program, and information return penalties step down the faster a return is corrected.
Does a fully insured plan face the same exposure as a self-funded one?
Less of it. The carrier carries most insurance-side requirements, and small insured plans are exempt from the group health plan excise tax for the carrier’s failures. The employer still owns the SPD, the CHIP notice, COBRA, the cafeteria plan and, above 100 participants, the Form 5500.
Can a penalty be waived?
Often reduced, sometimes waived. The IRS waives many penalties for reasonable cause without willful neglect, and the Labor Department routinely assesses less than the maximum. Neither is automatic, and both depend on the employer showing what it did once it knew.
How do we find out what we are exposed to?
Compare what the plan is required to have against what it actually has: the plan document and SPD, the notices and when they went out, the filings, and the cafeteria plan. We run that review as part of every renewal we look at.
Want to know which of these apply to you? Send us your renewal, or talk it through with someone first. No cost, no obligation.
Figures read at the source in September 2026. Most federal penalty amounts are adjusted for inflation each January. General information, not legal or tax advice; plan-specific questions belong with ERISA counsel, and we will bring them in.
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