MEWA Plan: Not Filing the Form M1 and Penalty

[5500Nerd]

Hello Everyone, We have a group that inadvertently formed a MEWA a few years ago and never filed the Form M1. They are debating to file them late now. Has anyone had any experience in doing this? Has anyone heard of group paying the very high penalty for not filing: $1992 per day late? Any advice would be greatly welcomed. Many thanks! 

[Brian Gilmore]

That's a tough one.  First of all, there are quite a few exceptions to the M-1 filing requirements.  Take a look here on page 8 (page 2 of the instructions) for a good summary to double-check none apply: https://www.dol.gov/sites/dolgov/files/EBSA/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/forms/m1-2024.pdf

If none apply, it's harsh because (for inexplicable reasons) there's no DFVCP equivalent for the M-1.  I'd suggest they work with counsel to see if there's any way they can back channel with the DOL to encourage them to come forward with some understanding they won't get hit with the full potential penalties.  It would be quite difficult to just start filing going forward without addressing the prior years given that the rules require filing 30 days prior to operations.  Good FAQ here: https://www.dol.gov/sites/dolgov/files/EBSA/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/forms/mewa-filing-tips.pdf

 

[Peter Gulia]

Consider that a lawyer’s inquiry to EBSA now (during a government shutdown) likely could be ineffective because an EBSA employee who could provide useful information might be precluded from working for EBSA.

Instead, a lawyer and her assistants might use the time before the government shutdown ends to gather facts, research relevant law, and refine arguments before one presents an inquiry.

This is not advice to anyone.