February 15, 2017

Reporting and Disclosure Reminders; Increased Penalties for Violations (article)

Following are some reporting and disclosure reminders and updates.   In addition, penalties for failure to comply with certain reporting and disclosure obligations, as well as failure to post certain work site notifications have increased.


Reporting Reminders

  • Medicare Part D Disclosure Notice to CMS.  All group health plans, whether insured or self-funded, are required to provide notices of creditable or non-creditable coverage to the Centers for Medicare and Medicaid Services (CMS) on an annual basis. The Creditable Coverage Disclosure Form filing must be accomplished electronically, and is due within 60 days of the commencement of the plan year. For calendar year plans, this means the disclosure filing must be accomplished no later than March 1, 2016. In addition, this disclosure form must be completed within 30 days upon other events such as when the prescription drug benefit is cancelled, or if any material change in the prescription drug benefits that would cause it to change status from creditable to non-creditable, or vice versa. Guidance and instructions, as well as the disclosure form, are available on the CMS website.
  • Form M-1 Filing.  If you sponsored a multiple employer welfare arrangement (MEWA) in 2016, make certain that you file the Form M-1 annual report by March 1, 2017 (see last month’s Benefit Beat article). 

Updated Model Disclosure Notices


  • Notice of Marketplace Options – Expiration Date

The Affordable Care Act requires all employers to provide a Notice of Marketplace Options to their employees explaining the pros and cons of buying coverage through the marketplace.  There are two different versions of the model notice – one to be used by employers who offer health coverage to some or all employees, and the other version is to be used by employers who do not offer health coverage.  Both model notices were approved for use by the Office of Management and Budget (OMB), with an expiration date of January 31, 2017. 


On February 1, 2017, the Department of Labor (DOL) published a notice in the federal register requesting OMB to extend the current version of the forms another three years, without any substantive change in the language contained in the forms.  Once the comment period ends on March 3, 2017, it is anticipated that the model forms will be re-issued to reflect a new expiration date.  In this interim, the DOL has released revised editions of the forms that now reflect an OMB expiration date of February 28, 2017.  Employers are encouraged to use these updated versions that display the February 28, 2017 expiration date until further notice from the DOL.


As a reminder, the notice of marketplace options must be provided to all new hires including full-time and part-time employees, without regard to eligibility status for the health plan, within 14 days of date of hire.  Once the OMB and the DOL release updated versions of these notices, we will provide them to you.  Following are links to the current forms that can continue to be used: 

  • Model notice for use by employers who offer coverage to some or all employees, available in English (pdf or word) and Spanish (pdf or word).
  • Model notice for employers who do not offer health coverage, available in English (pdf or word) and Spanish (pdf or word).


  • Updated Medicaid/CHIP Premium Assistance Notice

Employers sponsoring health plans are obligated to annually provide a premium assistance notice to their workforce.  This notification can be accomplished by using a model notice provided by the DOL’s Employee Benefit Security Administration (EBSA). The DOL has recently updated its model Medicaid/CHIP notice. The revised notice, current as of January 31, 2017, makes the following changes from the July 31, 2016 version:

  • New Medicaid program information, website and phone numbers in Colorado; and
  • Revised website addresses for Medicaid offices in Indiana, Iowa, Massachusetts, Minnesota, North Carolina, Oregon, Pennsylvania, South Carolina, Texas and Washington.

The notice explaining the right to premium assistance must be provided to employees residing in the below-listed states at least once annually, without regard to where the employer is located, or where the plan is sitused:


States with Premium Assistance






Rhode Island



South Carolina



South Dakota





New Hampshire



New Jersey



New York



North Carolina



North Dakota

West Virginia











As mentioned below, the Department of Labor increased the penalty for certain reporting and disclosure failures.  The penalty for failure to provide the Medicaid/CHIP notice is now $112 per day, per person, up from $110 per day, per person.


The revised Medicaid/CHIP notice is available for viewing and/or downloading from the DOL’s website, in both English (pdf or word) and Spanish (pdf or word),



Inflationary Adjustments to Certain Reporting and Disclosure Failures

Failure to abide by certain reporting and disclosure obligations could result in civil penalties assessed by the Departments of Labor, Health and Human Services and Treasury. These civil penalties may be adjusted at certain times for inflationary reasons due to enactment of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. For example, below are select inflationary adjustments announced by the Department of Labor that become effective January 13, 2017, as compared with the inflationary adjustments in effect last year (see Increased Penalties for Reporting and Disclosure Violations, Benefit Beat, 7/7/2016):



2017 Penalty Amount

2016 Penalty Amount

Failure or refusal to file the annual Form 5500

Up to $2,097 per day

Up to $2,063 per day

Failure to file Form M-1

Up to $1,527 per day

Up to $1,502 per day

Failure to provide Summary of Benefits and Coverage

Up to $1,105 per failure

Up to $1,087 per failure

Failure to notify employees of Children’s Health Insurance Program (CHIP) coverage opportunities

Up to $112 per day

Up to $110 per day


It should also be noted that several penalty adjustments apply to the protections afforded under the Genetic Information Nondiscrimination Act (GINA).  For example, individuals denied access to group health coverage based on his/her genetic information could result in civil penalties of up to $112 per day of noncompliance (up from $110 per day).


Work Site Postings.  The penalty for failure to post certain workplace posters has increased, as follows:

  • An employer subject to the federal Family and Medical Leave Act is required to post a notice in their work site locations that summarizes the major provisions of the Family and Medical Leave Act.   Failure to post this notice could result in a civil money penalty assessed by the Department of Labor’s Wage and Hour Division of up to $166 per each separate offense (up from $163).  The model FMLA work place poster is available in both English and Spanish through the DOL’s Wage and Hour Division’s website:  http://www.dol.gov/whd/fmla/posters.htm.
  • In a separate set of regulations, the Equal Employment Opportunity Commission (EEOC) announced an increase in the penalty for failure to post the EEOC notice from $525 to $534 per violation.  As background, employers subject to various laws enforced by the EEOC should ensure that they have the appropriate EEOC notice posted in their workplaces.  The EEOC enforces laws that prohibit workplace discrimination under such laws as:
  • Title VII of the Civil Rights Act (relating to discrimination on the basis of race, color, religion, national origin, or sex);
  • Americans with Disabilities Act (ADA) and ADA Amendments Act (ADAA);
  • Age Discrimination in Employment Act (ADEA);
  • Genetic Information Nondiscrimination Act of 2008 (GINA); and
  • Pregnancy Discrimination Act (PDA)

The EEOC poster, “Equal Employment Opportunity is the Law” is available in four languages: English, Spanish, Arabic and Chinese and can be obtained by downloading and printing it via EEOC website: http://www1.eeoc.gov/employers/poster.cfm.


The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.  

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