Interim Rule for the Assessment of Civil Penalties Under Section
502(c)(5) of ERISA [02/11/2000]
Volume 65, Number 29, Page 7181-7185
[[Page 7181]]
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DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
29 CFR Part 2560
RIN 1210-AA54
Interim Rule for the Assessment of Civil Penalties Under Section
502(c)(5) of ERISA
AGENCY: Pension and Welfare Benefits Administration, Department of
Labor.
ACTION: Interim final rule with request for comments.
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SUMMARY: This document contains an interim final rule that describes
procedures relating to the assessment of civil penalties under section
502(c)(5) of the Employee Retirement Income Security Act of 1974,
(ERISA) as amended by the Health Insurance Portability and
Accountability Act of 1996 (HIPAA). Section 502(c)(5) authorizes the
Secretary of Labor (the Secretary) to assess a civil penalty against
any person of up to $1,000 a day from the date of the person's failure
or refusal to file the information required to be filed by such person
with the Secretary under regulations prescribed pursuant to section
101(g){h} of ERISA. The interim final rule clarifies the manner in
which the Secretary will assess penalties under ERISA section
502(c)(5), as amended by HIPAA, and the procedures for agency review.
Separate documents containing interim final rules implementing the
reporting requirement under section 101(g){h} of ERISA and interim
final rules relating to procedures for administrative hearings and
appeals on assessments of penalties under ERISA section 502(c)(5)
appear separately in this issue of the Federal Register.
DATES: Effective date: This interim final rule is effective April 11,
2000.
Comment date: Written comments are invited and must be received by
the Department on or before March 13, 2000.
Applicability date: This section applies to administrators of
multiple employer welfare arrangements that are not group health plans
beginning May 1, 2000.
ADDRESSES: Interested persons are invited to submit written comments
(preferably with three copies) to: Pension and Welfare Benefits
Administration, Room C-5331, U.S. Department of Labor, 200 Constitution
Avenue, NW., Washington, DC 20210. Attention: MEWA reporting. Written
comments may also be sent by Internet to the following address:
``MEWApen@pwba.dol.gov'' (without the quotation marks).
All submissions will be open to public inspection and copying from
8:30 a.m. to 4:30 p.m. in the Public Documents Room, Pension and
Welfare Benefits Administration, U.S. Department of Labor, Room N-5638,
200 Constitution Avenue, NW., Washington, DC 20210.
FOR FURTHER INFORMATION CONTACT: Amy J. Turner, Pension and Welfare
Benefits Administration, U.S. Department of Labor, Rm C-5331, 200
Constitution Avenue, NW., Washington, DC 20210 (telephone (202) 219-
7006). This is not a toll-free number.
SUPPLEMENTARY INFORMATION:
A. Background
This document contains an interim final rule that provides guidance
relating to the assessment of civil penalties under section 502(c)(5)
of the Employee Retirement Income Security Act of 1974 (ERISA), as
amended by the Health Insurance Portability and Accountability Act of
1996 (Pub. L. 104-191) (HIPAA), for the failure or refusal to file a
report pursuant to section 101(g){h} \1\ of ERISA, as amended by HIPAA.
This regulation is designed to parallel the procedures set forth in
Sec. 2560.502c-2 regarding civil penalties under section 502(c)(2) of
ERISA relating to reports required to be filed under ERISA section
101(b)(4).
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\1\ Both the Small Business Job Protection Act of 1996 (Pub. L.
104-188) and the Health Insurance Portability and Accountability Act
of 1996 (Pub. L. 104-191) created a new section 101(g) of EIRSA.
Accordingly, section 101(g) of ERISA that relates to reporting by
certain arrangements is referred to in this document as section
101(g){h} of ERISA.
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B. Overview of the Interim Final Rule
Section 502(c)(5) provides that the Secretary may assess a civil
penalty against any person of up to $1,000 a day from the date of the
person's failure or refusal to file the report required to be filed
under section 101(g){h}. In order to implement this provision, the
Department is publishing this interim final rule, and, in a separate
document, interim final rules relating to procedures for administrative
hearings and appeals on assessments of civil penalties under ERISA
section 502(c)(5).
In general, the interim final rule in Sec. 2560.502c-5, discussed
in detail below, addresses:
The circumstances under which a penalty may be assessed
(Sec. 2560.502c-5(a));
Factors considered by the Department in determining the
amount of a penalty (Sec. 2560.502c-5(b));
The provision of notice to the administrator of the
Department's intention to assess a penalty (Sec. 2560.502c-5(c));
Waiver of all or part of the penalty by the Department
upon a showing of reasonable cause and the requirements relating to a
showing of reasonable cause (Sec. 2560.502c-5(d) and (e));
The effect of a failure to file a statement of reasonable
cause (Sec. 2560.502c-5(f));
The provision of notice to the administrator of the
Department's findings as to reasonable cause and the effect of such
notice where a penalty is assessed (Sec. 2560.502c-5(g));
The effect of a request for a hearing before an
administrative law judge (Sec. 2560.502c-5(h));
Service of notices (Sec. 2560.502c-5(i));
The liability of the administrator for assessed penalties
(Sec. 2560.502c-5(j));
A cross-reference to procedural rules relating to
administrative hearings (Sec. 2560.502c-5(k)); and
An applicability date provision (Sec. 2560.502c-5(l)).
In general, the assessment of penalties under section 502(c)(5) and
Sec. 2560.502c-5 would occur only in those instances where the
administrator fails or refuses to file a report within the prescribed
time frames or, after notification that the report has been rejected
and the reasons therefor, where the administrator fails or refuses to
file a corrected report within the 45 day period prescribed in
Sec. 2560.502c-5(b)(3). Accordingly, in the case of a report rejected
under Sec. 2520.101-2(d)(2), the administrator can avoid the assessment
of any penalty under section 502(c)(5) by making the necessary
corrections to the filing within the prescribed time frame. Moreover,
as reflected in paragraph (g) of the interim final rule, penalties may
be waived, in whole or in part, upon the administrator's showing of
reasonable cause for the failure to file a complete or timely report.
C. Discussion of the Interim Final Rule
1. Scope
Paragraph (a) of the interim final rule addresses the general
application of section 502(c)(5). Paragraph (a)(1) provides that the
administrator of a MEWA that is not a group health plan and for which a
report is required to be filed under section 101(g){h} of ERISA and
Sec. 2520.101-2 is liable for the penalties assessed under section
502(c)(5) for each failure or refusal to file a completed report.
Accordingly, if a person is required to file more than
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one report because that person serves an administrator with respect to
several entities for which a filing is required, separate penalties may
be assessed with respect to each instance for which there is a failure
or refusal to file the required report. Paragraph (a)(2) defines a
failure or refusal to file the report as a failure or refusal to file,
in whole or in part, that information described in ERISA section
101(g){h} and Sec. 2520.101-2, at the time and in the manner prescribed
for such filings. Accordingly, the filing of an incomplete report will
be treated as a failure to file under section 502(c)(5). See
Sec. 2520.101-2(d)(2).
2. Amount Assessed
Paragraph (b)(1) of the interim final rule provides that the
Department shall take into account the degree and/or willfulness of the
failure to file the report in determining the amount to be assessed
under section 502(c)(5). Consistent with the terms of section
502(c)(5), paragraph (b)(1) provides that the penalty assessed by the
Department shall not exceed $1,000 a day. With regard to the period for
which a penalty may be assessed, paragraph (b)(1) provides that the
penalty generally will be computed from the date of the administrator's
failure or refusal to file the report and continue up to the date on
which a report meeting the requirements of section 101(g){h} and
Sec. 2520.101-2, as determined by the Secretary, is filed. Accordingly,
under paragraph (b)(1) of this section, liability for penalties under
section 502(c)(5) would continue for each day up to the date compliance
is achieved. However, under paragraph (b)(2), the interim final rule
provides for tolling of the daily penalty where, upon receipt of a
notice of intent to assess a penalty (as described in paragraph (c)),
the administrator files with the Department a statement of reasonable
cause for the failure to file (as described in paragraph (e)). Under
paragraph (b)(2), the administrator will not incur liability for
penalties for any day beginning with the date the Department serves the
administrator a copy of the notice to assess a penalty and ending with
the day after the Department issues the notice of determination on the
statement of reasonable cause (as described in paragraph(g)). This
limited tolling of the penalty will permit MEWA administrators to
present arguments to the Department concerning any reasonable cause for
the failure to file without incurring penalties for the period of time
during which the administrator's statement of reasonable cause is being
considered by the Department.
Paragraph (b)(3) defines the date on which an administrator failed
or refused to file the report as the date on which the report was due
(determined without regard to any extension of time for filing). In
this regard, paragraph (b)(3) provides that a report which is rejected
under Sec. 2520.101-2(d)(2) shall be treated as a failure to file the
report when a revised report meeting the requirements of this section
is not filed within 45 days of the date of the Department's notice of
rejection.
In those situations where an extension of time is granted for the
filing of the report and the administrator fails either to file a
timely report or a complete report within the extension period, the
administrator should not, for purposes of the section 502(c)(5)
penalty, benefit from the requested extension. Accordingly, the interim
rule states that for purposes of paragraph (b)(3), the penalty is
assessed beginning on the day after the date of the administrator's
failure or refusal to file the report.
3. Notice of Penalty
Paragraph (c) of the interim final rule provides that, prior to the
assessment of any penalty under section 502(c)(5), the Department shall
provide the administrator with a written notice indicating the
Department's intent to assess a penalty under section 502(c)(5), the
amount of the penalty, the period to which the penalty applies, and a
statement of the facts and reasons for the penalty. This notice is to
be served in accordance with the service of notice provisions of
Sec. 2560.502c-5(i) of this interim final rule. Under Sec. 2560.502c-
5(f) of this interim final rule, this notice becomes a final order of
the Secretary, within the meaning of Sec. 2570.91(g) (see interim final
rules Secs. 2570.90 et seq., published separately in this issue of the
Federal Register), within 30 days of the service of notice, unless a
statement of reasonable cause, described in Sec. 2560.502c-5(e) of the
interim final rule, is filed with the Department.
4. Waiver of Penalty
Paragraphs (d), (e), (f), (g) and (h) of the interim final rule
generally relate to the waiver of penalties under section 502(c)(5).
Paragraph (d) provides that the Department may waive all or part of the
penalty to be assessed under section 502(c)(5) upon a showing of
reasonable cause for the failure to file the report. Paragraph (e)
provides that, subsequent to the issuance of a notice of the
Department's intent to assess a penalty, the administrator shall have
30 days from the date of the service of notice to make an affirmative
showing of reasonable cause for the failure to file a complete report
or why the penalty, as calculated, should not be assessed. Paragraph
(e) requires that the statement of reasonable cause be in the form of a
written statement that sets forth all the facts alleged in support of
reasonable cause and contains a declaration by the administrator that
the statement is made under penalties of perjury.
Paragraph (f) describes the effect of a failure to file the
statement of reasonable cause within the prescribed 30 day period. A
failure on the part of the administrator to file a timely statement of
reasonable cause will constitute a waiver of the right to appear and
contest the facts alleged in the Department's notice and an admission
of the facts alleged in the notice for purposes of any adjudicatory
proceeding involving the assessment of a penalty under section
502(c)(5). Under paragraph (f), the Department's notice of intent to
assess a penalty, described in paragraph (c), then becomes a final
order of the Secretary, within the meaning of paragraph (g) of
Sec. 2570.91. (See Secs. 2570.90 et seq., published separately in this
issue of the Federal Register).
Paragraph (g)(1) of the interim final rule provides that, following
a review of the facts alleged in the statement of reasonable cause, the
Department, in a notice of determination, shall notify the
administrator of its intention to waive the penalty, in whole or in
part, and/or assess a penalty. If it is the intention of the Department
to assess a penalty, the notice shall indicate the amount of the
penalty and a brief statement of the reasons for assessing the penalty.
Under paragraph (g)(2), this notice becomes a final order 30 days after
the date of service of the notice, except as provided in paragraph (h).
In general, paragraph (h) provides that the notice described in
paragraph (g) shall not become a final order unless, within 30 days of
the date of service of the notice, the administrator or representative
thereof files a request for a hearing under Sec. 2570.90 et seq.
(published separately in this issue of the Federal Register), and files
an answer to the notice. The request for hearing and answer shall be
filed in accordance with Sec. 2570.92. The answer opposing the proposed
sanction shall be in writing, and supported by reference to specific
circumstances or facts surrounding the notice of determination issued
pursuant to paragraph (g).
5. Service of Notices
Paragraph (i) of the interim final rule describes the manner in
which the notice of intent to assess a penalty, described in paragraph
(c), and the
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notice of determination on a statement of reasonable cause, described
in paragraph (g), will be served. Under paragraph (i) of the interim
final rule, service of notice shall be made either: (1) By delivering a
copy to the administrator or the administrator's representative; (2) by
leaving a copy at the principal office, place of business, or residence
of the administrator or the administrator's representative; or (3) by
mailing a copy to the last known address of the administrator or the
administrator's representative. If service is accomplished by certified
mail, service is complete upon mailing. If service is done be regular
mail, service is complete upon receipt by the addressee.
6. Liability
Paragraph (j) of the interim final rule clarifies the liability of
the parties for penalties assessed under section 502(c)(5). Paragraph
(j)(1) provides that if more than one person is responsible as
administrator for the failure to file the report, all such persons
shall be jointly and severally liable for such failure. Paragraph
(j)(2) provides that any person against whom a penalty is assessed
under section 502(c)(5) is personally liable for the payment of such
penalty. Paragraph (j)(2) is intended to make clear that liability for
the payment of penalties assessed under section 502(c)(5) is the
personal liability of the person against whom the penalty is assessed
and not a liability of the MEWA. Accordingly, assets of the MEWA can
not be used to pay the penalty.
7. Applicability
Paragraph (l) of the interim rule clarifies that this section
generally applies to administrators of multiple employer welfare
arrangements that are not group health plans beginning May 1, 2000.
Under a transition safe harbor period, however, no civil penalty will
be assessed against an administrator that has made a good faith effort
to comply with a Sec. 2520.101-2 filing that is due in the Year 2000.
This transition rule was created because, during this first year in
particular, the Department is focused on educating administrators about
this filing requirement and is committed to working with them to help
them comply. In this regard, the Department has developed filers'
guides which may be helpful in filing the Form M-1. These filers'
guides will be made available on the Pension and Welfare Benefits
Administration's website at www.dol.gov/dol/pwba and through their
toll-free publication hotline at 1-800-998-7542. Also, the Pension and
Welfare Benefits Administration's help desk (202-219-8818) is available
in case administrators have questions or if they need any assistance
with filings.
D. Interim Final Rule With Request for Comments
Section 734 of ERISA (formerly section 707) authorizes the
Secretary of Labor, consistent with section 104 of HIPAA, to promulgate
any such regulations as may be necessary or appropriate to carry out
the provisions of Part 7 of ERISA. In addition, this section
specifically authorizes the Secretary to promulgate any interim final
rules as the Secretary determines are appropriate to carry out Part 7
of ERISA. In addition, section 505 of ERISA authorizes the Secretary to
prescribe such regulations as the Secretary finds necessary or
appropriate to carry out the provisions of Title I of ERISA. The report
required to be filed under section 101(g)(h) is for the purpose of
determining the extent to which the requirements of Part 7 are being
carried out. Accordingly, the Department has determined that issuing
this regulation in interim final form is necessary in order for the
Secretary to continue to effectively enforce the requirements of
section 101(g){h} of ERISA and the implementing regulations under
Sec. 2520.101-2. Written comments on these interim rules are invited.
E. Executive Order 12866 Statement
Under Executive Order 12866, the Department must determine whether
a regulatory action is ``significant'' and therefore subject to the
requirements of the Executive Order and subject to review by the Office
of Management and Budget (OMB). Under section 3(f) of the Executive
Order, a ``significant regulatory action'' is an action that is likely
to result in a rule (1) having an annual effect on the economy of $100
million or more, or adversely and materially affecting a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local or tribal governments or communities
(also referred to as ``economically significant''); (2) creating
serious inconsistency or otherwise interfering with an action taken or
planned by another agency; (3) materially altering the budgetary
impacts of entitlement grants, user fees, or loan programs or the
rights and obligations of recipients thereof; or (4) raising novel
legal or policy issues arising out of legal mandates, the President's
priorities, or the principles set forth in the Executive Order. On the
basis of these criteria, the Department has determined that this
regulatory action is not significant within the meaning of the
Executive Order.
F. Paperwork Reduction Act
The rule being issued here is not subject to the requirements of
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) because it
does not contain an ``information collection request'' as defined in 44
U.S.C. 3502(3).
G. Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., (RFA)
requires each Federal agency to perform an initial regulatory
flexibility analysis for all rules subject to the notice and comment
requirements of section 553(b) of the Administrative Procedure Act (5
U.S.C 551 et seq.) unless the head of the agency certifies that the
rule will not, if promulgated, have a significant economic impact on a
substantial number of small entities. Small entities include small
businesses, organizations, and governmental jurisdictions.
Because these rules are being issued as interim final rules and not
as a notice of proposed rulemaking, the RFA does not apply and the
Department is not required to either certify that the rule will not
have a significant impact on a substantial number of small entities or
conduct a regulatory flexibility analysis. The Department does not
anticipate that this interim final rule will impose a significant
impact on a substantial number of small entities, however, regardless
of whether one uses the definition of small entity found in regulations
issued by the Small Business Administration (13 CFR 121.201) or one
defines small entity, on the basis of section 104(a)(2) of ERISA, as an
employee benefit plan with fewer than 100 participants. The Department
invites comments on the effect of this interim final rule on small
entities.
H. Small Business Regulatory Enforcement Fairness Act
The interim final rule being issued here is subject to the
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.) and has been transmitted to Congress and
the Comptroller General for review. The rule is not a ``major rule'' as
that term is defined in 5 U.S.C. 804, because it is not likely to
result in (1) an annual effect on the economy of $100 million or more;
(2) a major increase in costs or prices for consumers, individual
industries, or federal, State, or local government agencies, or
geographic regions; or (3) significant adverse effects on
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competition, employment, investment, productivity, innovation, or on
the ability of United States-based enterprises to compete with foreign-
based enterprises in domestic or export markets.
I. Unfunded Mandates Reform Act
For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4), as well as Executive Order 12875, this proposed rule does not
include any Federal mandate that may result in expenditures by State,
local, or tribal governments, and will not impose an annual burden of
$100 million or more on the private sector.
Statutory Authority
The interim final rule set forth herein is issued pursuant to
the authority contained in section 502(c)(5) of ERISA (Pub. L. 104-
191, 110 Stat. 1936, 1952, 29 U.S.C. 1132(c)(5)), section 505 of
ERISA (Pub. L. 93-406, 88 Stat. 892, 894, 29 U.S.C. 1135) and
section 734 of ERISA (Pub. L. 104-204, 110 Stat. 2874, 2935, 29
U.S.C. 1194c), and under Secretary of Labor's Order 1-87, 52 FR
13139, April 21, 1987.
List of Subjects in 29 CFR Part 2560
Claims, Employee benefit plans, Employee Retirement Income Security
Act, Law enforcement, Multiple Employer Welfare Arrangements, Pension
and Welfare Benefits Administration, Reporting and disclosure.
For the reasons set out in the preamble, Part 2560 of Chapter XXV
of Title 29 of the Code of Federal Regulations is amended as follows:
PART 2560--[AMENDED]
1. The authority for Part 2560 is revised to read:
Authority: 29 U.S.C. 1132, 1135, 1194 and Secretary's Order 1-
87, 52 FR 13139 (April 21, 1987).
Section 2560.502-1 also issued under 29 U.S.C. 1132(b)(2).
Section 2560.502i-1 also issued under 29 U.S.C. 1132(i).
Section 2560.503-1 also issued under 29 U.S.C. 1133.
2. Part 2560 is amended by adding Sec. 2560.502c-5 to read:
Sec. 2560.502c-5-- Civil penalties under section 502(c)(5).
(a) In general. (1) Pursuant to the authority granted the Secretary
under section 502(c)(5) of the Employee Retirement Income Security Act
of 1974 Pub.L. 93-406, 88 Stat. 840-52, as amended by Pub. L. 104-191,
101 Stat. 1936) (the Act), the administrator of a multiple employer
welfare arrangement (MEWA) (within the meaning of section 3(40)(A) of
the Act) that is not a group health plan, and that provides benefits
consisting of medical care (within the meaning of section 733(a)(2)),
for which a report is required to be filed under section 101(g){h} of
the Act and Sec. 2520.101-2, shall be liable for civil penalties
assessed by the Secretary under section 502(c)(5) of the Act for each
failure or refusal to file a completed report required to be filed
under section 101(g){h} and Sec. 2520.101-2. The term ``administrator''
is defined in Sec. 2520.101-2(b).
(2) For purposes of this section, a failure or refusal to file the
report required to be filed under section 101(g){h} shall mean a
failure or refusal to file, in whole or in part, that information
described in section 101(g){h} and Sec. 2520.101-2, on behalf of the
MEWA, at the time and in the manner prescribed therefor.
(b) Amount assessed.--(1) The amount assessed under section
502(c)(5) shall be determined by the Department of Labor, taking into
consideration the degree and/or willfulness of the failure to file the
report. However, the amount assessed under section 502(c)(5) of the Act
shall not exceed $1,000 a day, computed from the date of the
administrator's failure or refusal to file the report and, except as
provided in paragraph (b)(2) of this section, continuing up to the date
on which a report meeting the requirements of section 101(g){h} and
Sec. 2520.101-2, as determined by the Secretary, is filed.
(2) If, upon receipt of a notice of intent to assess a penalty (as
described in paragraph (c) of this section), the administrator files a
statement of reasonable cause for the failure to file, in accordance
with paragraph (e) of this section, a penalty shall not be assessed for
any day from the date the Department serves the administrator with a
copy of such notice until the day after the Department serves notice on
the administrator of its determination on reasonable cause and its
intention to assess a penalty (as described in paragraph (g) of this
section).
(3) For purposes of this paragraph, the date on which the
administrator failed or refused to file the report shall be the date on
which the report was due (determined without regard to any extension of
time for filing). A report which is rejected under Sec. 2520.101-2
shall be treated as a failure to file a report when a revised report
meeting the requirements of this section is not filed within 45 days of
the date of the Department's notice of rejection. If a revised report
meeting the requirements of this section, as determined by the
Secretary, is not submitted within 45 days of the date of the notice of
rejection by the Department, a penalty shall be assessed under section
502(c)(5) beginning on the day after the date of the administrator's
failure or refusal to file the report.
(c) Notice of intent to assess a penalty. Prior to the assessment
of any penalty under section 502(c)(5), the Department shall provide to
the administrator of the MEWA a written notice indicating the
Department's intent to assess a penalty under section 502(c)(5), the
amount of such penalty, the period to which the penalty applies, and a
statement of the facts and the reason(s) for the penalty.
(d) Waiver of assessed penalty. The Department may waive all or
part of the penalty to be assessed under section 502(c)(5) on a showing
by the administrator that there was reasonable cause for the failure to
file the report.
(e) Showing of reasonable cause. Upon issuance by the Department of
a notice of intent to assess a penalty, the administrator shall have 30
days from the date of the service of notice, as described in paragraph
(i) of this section, to file a statement of reasonable cause for the
failure to file a complete report or why the penalty, as calculated,
should not be assessed. A showing of reasonable cause must be made in
the form of a written statement setting forth all the facts alleged as
reasonable cause. The statement must contain a declaration by the
administrator that the statement is made under the penalties of
perjury.
(f) Failure to file a statement of reasonable cause. Failure of an
administrator to file a statement of reasonable cause within the 30 day
period described in paragraph (e) of this section shall be deemed to
constitute a waiver of the right to appear and contest the facts
alleged in the notice, and such failure shall be deemed an admission of
the facts alleged in the notice for purposes of any proceeding
involving the assessment of a civil penalty under section 502(c)(5).
Such notice shall then become a final order of the Secretary, within
the meaning of Sec. 2570.91(g).
(g) Notice of the determination on statement of reasonable cause--
(1) The Department, following a review of all the facts alleged in
support of a complete or partial waiver of the penalty, shall notify
the administrator, in writing, of its intention to waive the penalty,
in whole or in part, and/or assess a penalty. If it is the intention of
the Department to assess a penalty, the notice shall indicate the
amount of the penalty, not to exceed the amount described in paragraph
(c) of this section, and a brief statement of the reasons for assessing
the penalty.
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(2) Except as provided in paragraph (h) of this section, a notice
issued pursuant to this paragraph indicating the Department's intention
to assess a penalty shall become a final order, within the meaning of
Sec. 2570.91(g), 30 days after the date of service of the notice.
(h) Administrative hearing. A notice issued pursuant to paragraph
(g) of this section will become the final order of the Department of
Labor, unless, within 30 days from the date of the service of the
notice, the administrator or representative thereof files a request for
a hearing under Sec. 2570.90 et seq., and files and answer to the
notice. The request for hearing and answer shall be filed in accordance
with Sec. 2570.92. The answer opposing the proposed sanction shall be
in writing, and supported by reference to specific circumstances or
facts surrounding the notice of determination issued pursuant to
paragraph (g).
(i) Service of notice--(1) Service of notice shall be made either:
(i) By delivering a copy to the administrator or representative
thereof;
(ii) By leaving a copy at the principal office, place of business,
or residence of the administrator or representative thereof; or
(iii) By mailing a copy to the last known address of the
administrator or representative thereof.
(2) If service is accomplished by certified mail, service is
complete upon mailing. If done by regular mail, service is complete
upon receipt by the addressee
(j) Liability--(1) If more than one person is responsible as
administrator for the failure to file the report, all such persons
shall be jointly and severally liable with respect to such failure.
(2) Any person against whom a civil penalty has been assessed under
section 502(c)(5) pursuant to a final order, within the meaning of
Sec. 2570.91(g), shall be personally liable for the payment of such
penalty.
(k) Cross-reference. See Secs. 2570.90 through 101 of this chapter
for procedural rules relating to administrative hearings under section
502(c)(5) of the Act.
(l) Applicability date--(1) In general. This section applies to
administrators of multiple employer welfare arrangements that are not
group health plans beginning May 1, 2000.
(2) Transitional safe harbor period. No civil penalty will be
assessed against an administrator that has made a good faith effort to
comply with a Sec. 2520.101-2 filing that is due in the Year 2000.
Signed at Washington DC, this 4th day of February, 2000.
Leslie B. Kramerich,
Acting Assistant Secretary, Pension and Welfare Benefits
Administration, Department of Labor.
[FR Doc. 00-2936 Filed 2-10-00; 8:45 am]
BILLING CODE 4510-29-P
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