Who Enforces Group Health Plan Rules, and How You Find Out.
Four different parties can act when a group health plan misses a rule: the Department of Labor, the IRS, HHS and your own employees. This guide maps who enforces what, how a problem comes to light and what you can fix first.
Who Enforces Which Rule.
General information, not legal or tax advice. Dollar amounts are left to the linked pages, which cover them in detail.
Department of Labor
Investigates ERISA plans and can sue for relief. See what a request for records usually covers.
Internal Revenue Service
Excise taxes on non-compliant group health plans are reported by the employer on Form 8928.
HHS and HIPAA
The Office for Civil Rights enforces the HIPAA Privacy and Security Rules.
Your Own Employees
Participants can sue under ERISA, and a missed document request can carry personal exposure.
Voluntary Correction
The Delinquent Filer program lowers penalties for overdue annual reports, until a notice arrives.
Personal Liability
Fiduciaries can be personally liable to the plan, and the employer carries the excise tax.
DOL Investigates Under ERISA.
ERISA gives the Secretary of Labor the power to investigate. Under section 504, 29 U.S.C. 1134, the Secretary may require reports, books and records, and may enter, inspect and question when there is reasonable cause to believe a violation may exist. Without reasonable cause, a plan generally cannot be required to submit its books or records more than once in any 12-month period.
Under section 502(a)(2) and (a)(5), 29 U.S.C. 1132, the Secretary can also sue, either for relief under section 409 or to stop a violation. Most employers meet this side of the law as a letter asking for documents. We keep a DOL health plan audit toolkit so the file is built before the letter arrives.
The IRS Relies On Self-Reporting.
Section 4980D of the Internal Revenue Code taxes any failure of a group health plan to meet the market reform requirements of chapter 100. Under section 4980D(e)(1), the employer is the liable party in most cases. The same chapter of the Code covers COBRA failures under section 4980B.
The IRS describes Form 8928 as the form group health plans or employers file to report the tax due. For failures under sections 4980B and 4980D, the instructions set the due date at the filer’s federal income tax return due date. Relief exists in section 4980D(c): no tax where the failure was unknown and could not have been found with reasonable diligence, none where a reasonable-cause failure is corrected within 30 days of when you knew or should have known, and a possible waiver where the tax would be excessive. Amounts are on our Form 8928 page and the COBRA excise tax page.
HHS Reaches HIPAA And Some Public Plans.
HHS states that its Office for Civil Rights enforces the HIPAA Privacy and Security Rules, and its process begins with intake and review of a complaint. Our HIPAA enforcement page covers the tiers.
For the Public Health Service Act market reforms, 42 U.S.C. 300gg-22 lets each state require insurers to comply. The Secretary of HHS steps in only after finding a state has failed to substantially enforce a provision, and the penalty authority is aimed at non-Federal governmental group health plans and issuers. For most private employers, the DOL and IRS channels above are the ones that matter.
Employees Can Enforce Too.
No agency has to be involved. Section 502(a)(1)(B) lets a participant or beneficiary sue to recover plan benefits or enforce rights under the plan, and section 502(a)(3) allows suits to stop violations or obtain other equitable relief. A plan administrator who does not answer a written request for required information within 30 days may, in the court’s discretion, be personally liable to that participant under section 502(c)(1). The daily amount is in the statute and adjusted over time, so see our plan document request page.
How A Problem Usually Comes To Light.
A government review is rarely random. The common paths are an employee complaint, a dispute over a denied claim, a Form 5500 that was filed with errors or not filed, and a notice that does not match what the agency holds. Our DOL and IRS audits guide walks through how these start.
Your employees are often the first to raise it, so a prompt, written answer to every request is the cheapest protection.
Voluntary Correction Programs.
The Delinquent Filer Voluntary Compliance Program lets plan administrators submit overdue annual reports while paying lower civil penalties. DOL says plans already notified of a failure to file, or that received a Notice of Intent to Assess a Penalty, are not eligible. Amended filings and Form 5500-EZ filers are also excluded. See DFVCP penalty caps.
EBSA also runs the Voluntary Fiduciary Correction Program for employers and plan officials to correct certain ERISA violations. DOL’s page does not state eligibility limits, so confirm with EBSA before relying on it; our VFCP page has more.
We did not confirm a separate IRS self-reporting program. For excise taxes, the route is Form 8928 and the section 4980D(c) relief above.
Plan Sponsor, Administrator And Fiduciaries.
Under ERISA section 3(16), 29 U.S.C. 1002(16), the administrator is the person named in the plan document, and if none is named, the plan sponsor, which for an employer plan is the employer. A fiduciary is anyone who exercises discretionary authority or responsibility in running the plan, under section 3(21)(A). Under section 409(a), 29 U.S.C. 1109(a), a fiduciary who breaches a duty is personally liable to make good the plan’s losses, and a court may remove that fiduciary. The excise tax discussed above falls on the employer. Our Form 8928 liability page covers who bears it when a vendor is involved.
Six Questions To Ask This Quarter.
- Does the plan document name the plan administrator?
- Could we produce the plan document, summary plan description and amendments within a week?
- Do we log written requests from employees and the date we answered?
- Was a Form 5500 filed for each plan year it was required?
- Do we know the date we first learned of any failure, since the 30-day clock in section 4980D(c)(2) runs from it?
- Is Form 8928 on the calendar with the tax return date?
No Michigan statute is cited on this page, because none was confirmed at a primary source. We are licensed insurance brokers, and we can walk through these questions with you.
Laws And Sources
ERISA Section 504, 29 U.S.C. 1134: DOL investigative authority.
ERISA Section 502, 29 U.S.C. 1132: Civil actions by the Secretary and participants.
ERISA Section 409, 29 U.S.C. 1109: Personal liability of fiduciaries.
ERISA Section 3, 29 U.S.C. 1002: Definitions of administrator, plan sponsor and fiduciary.
Section 4980D, Internal Revenue Code: Excise tax and relief provisions.
42 U.S.C. 300gg-22: State and HHS enforcement of market reforms.
IRS, Instructions for Form 8928: Who files and due dates.
IRS, About Form 8928: Purpose of the form.
HHS, HIPAA Compliance and Enforcement: Office for Civil Rights role.
DOL, DFVC Program: Eligibility and purpose.
DOL, Voluntary Fiduciary Correction Program: Program overview.
General information, not legal or tax advice.
Quick Answers.
Short replies on this page’s topic, each tied to a fuller guide.
Who enforces ERISA rules for an employer health plan?
The Department of Labor can investigate under ERISA section 504 and sue under section 502, and participants can bring their own suits under section 502.
Does the IRS send a bill for Form 8928 excise taxes?
The IRS describes Form 8928 as the form that group health plans or employers file to report the tax due, so the employer reports it. We did not confirm a billing process.
Can an employee sue over a health plan problem?
Yes. Section 502(a)(1)(B) lets a participant or beneficiary sue to recover benefits or enforce plan rights, without a government agency taking the case.
Can we fix a late Form 5500 before DOL contacts us?
Possibly. The DFVC Program offers lower civil penalties for overdue reports, but DOL says plans already notified of a failure to file are not eligible.
Who is personally responsible when a plan misses a rule?
Fiduciaries can be personally liable to make good plan losses under section 409(a), and the employer is the liable party for the section 4980D excise tax.
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