EBSA Expands Delinquent Filer Voluntary Compliance Program

The Employee Benefits Security Administration expanded its Delinquent Filer Voluntary Compliance Program by allowing the self-correction program to include multiple employer welfare arrangements that failed to submit required Form M-1, according to a Department of Labor announcement.

The program allows plan administrators to voluntarily submit tardy annual reports to face a lower penalty than if the reports were filed later. According to the release, the expansion of the program allows multiple employer welfare arrangements to catch up on overdue filings without having to pay hefty penalties. By simplifying the process and making it less costly, the notice stated that plan administrators would ensure that participants received adequate protections and benefits provided by the Employee Retirement Income Security Act.

“The Delinquent Filer Voluntary Compliance Program has helped foster a culture of compliance and trust by giving plan officials the opportunity to proactively comply with the law,” said Deputy Secretary of Labor Keith Sonderling in a statement. “Expanding access to this program just makes sense—it supports responsible efforts to correct violations and helps us fulfill our mission to put both workers and employers first.”

The Form M-1 must be filed annually by multiple employer welfare arrangements and other entities that provide health and welfare benefits to employees of multiple employers. This form discloses critical information about multiple employer welfare arrangements and their operations. Failure to file the Form M-1 on time can result in substantial penalties.

Previously, administrators of multiple employer welfare arrangement plans had no meaningful way to voluntarily correct filing violations and avoid these penalties, according the DOL announcement.

In 2002, EBSA capped the cumulative daily penalty amount for Form 5500 annual reports for a plan year at $750 for small plans and $2,000 for large plans. The most recent modifications concerning multiple employer welfare arrangements mean those seeking to file a late Form M-1 would face a $750 fee by using the voluntary compliance program.