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Benefit Compliance Penalties Updated for 2024

The Department of Labor (DOL) announced annual inflation increases to several employee benefit compliance penalties last week. The full schedule of the annual inflation related increases is available online. The new maximums are effective for compliance penalties assessed after January 15, 2024. The date the benefit related violation occurred does not impact the applicable penalty limit.

Forms 5500 Penalties

ERISA covered Group Health Plans with more than 100 participants must file a Form 5500 for each Plan Year. The filings are due within seven months following the end of each Plan Year. The maximum daily penalties for failing to timely file Form 5500 increased from $2,586 to $2,670. There is no cap on the total potential penalty. Large benefit plans that fail to file for several years face potential compliance penalties of millions of dollars. Late filers drastically reduce these potential penalties by taking advantage of the government’s Delinquent Filer Voluntary Compliance Program.

Under the Affordable Care Act (ACA), group health plans must provide plan participants with a Summary of Benefits and Coverage (SBC). SBCs must be provided each Plan Year and must meet specific appearance, language and content requirements. The maximum compliance penalties for failing to provide SBCs to participants increased from $1,362 to $1,406 per failure. Each plan participant who is not provided a SBC in a timely manner is considered to be a unique failure for the purposes of the penalties.

Although SBCs are typically provided by a benefit plan’s insurer or third party administrator, it is typically the employer’s responsibility to distribute the provided forms to its employees.

Admin America’s Benefit Compliance Experts Can Help!

Admin America encourages employers and their professional benefit advisors to direct any questions they have about employee benefit related compliance penalties to our experts via e-mail at or by calling (678) 578-4644. They can also request a call from us. More information about Admin America’s services is also available online.

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Filing 2023 1094 and 1095 Forms With the IRS by Mail? Think Again

Before this year, small employers could file their ACA Employer Reporting forms with the IRS on paper in the mail.  Filing via U.S. mail was available so long as the employer was filing fewer than 250 returns. 

Electronic Filing Now Required for Almost All Employers

Beginning with filings for 2023 (filed in 2024), the IRS has virtually eliminated that option.  Federal Regulations now require employers filing 10 or more returns in aggregate to file their Forms 1094-C and 1095-C electronically.  For the purposes of this new rule, “in aggregate” refers to the ACA related forms and Forms W-2 and 1099.  This aggregation will effectively limit future by-mail filings to employers with 1-5 employees, at most.

This change applies to both the C-Forms filed by Applicable Large Employers (ALEs) and the B-Forms filed by non-ALEs sponsoring a self-insured plan.  Because of this change, employers that previously filed 1094 and 1095 Forms via the mail will need to make arrangements to file electronically through the IRS’s Affordable Care Act Information Returns (AIR) system or work with an ACA reporting vendor with access to that system.

Waivers For Financial Hardship

The IRS can issue waivers for the electronic filing requirement for financial hardship.  However, there are important steps employers must take before the 1094 and 1095 Form filing deadlines in order to apply.  Employers seeking a waiver must submit IRS Form 8508 at least 45 days before the April 1, 2024 due date of 2023 ACA filings.  That deadline would be February 14, 2024.  Waiver applications based on financial hardship must be supported by two documented cost estimates from third party providers.  The IRS will reject waiver requests without the required third party estimates.

Penalties For Failure To Electronically File

Employers that fail to timely electronically file their 1094 and 1095 Forms (or receive a waiver) are subject to penalties for incorrect reporting.  For 2024, the failure to correctly file penalty is $310 per form. 

Admin America Can Help!

Admin America is available to assist employers with electronic filing of their 2023 (and prior year) 1094 and 1095 Forms.  If appropriate, Admin America can also assist with extensions of time to file to extend the April 1 deadline for an additional 30 days. Interested employers can obtain more information about Admin America’s ACA filing services online or by contacting us at

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Health FSA and Transit and Parking Reimbursement Plan Limits for 2024 Confirmed By The IRS

The annual limits for Health FSAs and Transit and Parking Reimbursement Plans are increasing in 2024. This week the IRS announced cost-of-living increases for several types of employee benefits in Revenue Procedure 2023-34. Each year, the IRS announces cost-of living related increases for different employee benefit related limits tied to rates of increase in the Consumer Price Index. The statutes authorizing Health FSAs and Transit and Parking and Reimbursement Plans are among those that require these adjustments.

Among the limits announced this week are those applicable to Health Flexible Spending Arrangements (Health FSAs) with Plan Years beginning at any time during 2024. In addition, they apply to reimbursements paid by Transit and Parking Reimbursement Plans for expenses incurred during any month of 2024.

Health FSAs

Plans with 12 month Plan Years beginning in 2024 may allow employee salary reduction contributions up to $3,200 per year. This is an increase of $150 over the $3,050 limit applicable to Plan Years beginning in 2023.  Health FSAs with Plan Years consisting of less than 12 months must pro-rate the applicable limit.  

The new employee contribution limit also impacts the Health FSA rollover limit for Plan Years beginning during 2024.  In 2020, the IRS linked the maximum annual Health FSA rollover to 20% of the annual employee contribution limit.  Therefore, for Health FSAs beginning in 2024, $640 can be rolled over into the following Plan Year.  This is an increase of $30 over the originally announced $610 limit for Plan Years beginning in 2023.

Transit and Parking Reimbursement Plans

Plans may reimburse participating employees up to $315 per month for qualifying benefits. This is a $15 per month increase over the 2023 monthly limit of $300.  The $315 limit applies separately to monthly benefits provided for Transit / Van Pooling related expenses and Parking related expenses.  Therefore, employers could reimburse participants up to $630 per month if the employee incurs eligible Transit and Parking expenses.

Next Steps for Admin America Health FSA and Transit and Parking Reimbursement Clients

Admin America will automatically adjust the applicable 2024 annual limits for Health FSA and Transit and Parking Reimbursement clients previously utilizing the 2023 limits. Clients who wish to take advantage of these automatic adjustments do not need to take any action.  Health FSA and Transit and Parking Reimbursement Clients utilizing the 2023 maximums who do not wish for Admin America to automatically adjust their 2024 limits may submit plan changes online here or may send an e-mail request to


If you have any questions, please contact our FSA customer service. You can reach team via telephone at (678) 578-4641 or via e-mail at