The Office of Management and Budget Cancels CMPs Inflation Adjustments for 2026

By Mark Popolizio, J.D., Jeremy Farquhar

June 12, 2026 / 4 min read

As outlined in our recent article, in January 2026 the Department of Health and Human Services (DHHS) issued a Final Rule announcing the 2025 annual inflation adjustments to numerous federal civil money penalties (CMPs). As part of this update, and pertinent to this article’s focus, the maximum daily CMPs amount for non-group health plan (NGHP) Section 111 reporting increased to $1,512. This updated figure of $1,512 is referenced as the “2025 maximum adjusted penalty.”^[1]

In a new development, Russell Vought, the Director of the Office of Management and Budget (OMB), recently issued a memorandum (M-26-11), cancelling the 2026 CMPs penalty inflation adjustments.^[2]According to this memo, the Bureau of Labor Statistics (BLS) was unable to produce the data necessary to calculate the 2026 inflation adjustments due to last Fall’s government shutdown.^[3] As such, this memo directs applicable government agencies to continue using the 2025 CMPs rates.^[4]

On this point, this memo explains, in pertinent part, as follows:

Per the [Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Act)], the annual civil monetary penalties cost-of-living adjustment is based on [Bureau of Labor Statistics (BLS)] data from the month of October of the prior year. Due to the government shutdown, BLS was unable to produce the October 2025 data. Based on the lack of October 2025 [Consumer Price Index (CPI-U)] data, which is needed to make adjustments under the 2015 Act, there will be no updated cost-of-living adjustment multiplier for 2026 and agencies will continue using the 2025 civil monetary penalty levels as applicable. The purpose of this guidance is to inform agencies of the cancellation of the inflation adjustment for 2026 based on the lack of October 2025 CPI-U data due to the lapse in appropriations.^[5]

While the 2026 annual inflation updates are canceled, OMB’s memo did not provide any indication regarding when the next annual inflation adjustment may be issued. In this regard, from the authors’ general observations, it is noted that the annual inflation updates over the past few years were issued at seemingly random points, with this interesting history outlined more fully in the endnote to this sentence for those interested.^[6]Going forward, Verisk will continue to monitor when the next annual inflation update is eventually issued and provide updates as warranted.

Compliance Considerations

Based on the OMB’s memo, the current 2025 daily maximum adjusted penalty amount of $1,512 regarding Section 111 NGHP CMPs will remain in effect until further notice.

Accordingly, the current Section 111 NGHP CMPs rates based on the 2025 inflation update, utilizing CMS’s “tiered” CMPs calculation approach, are as follows:

Tier 1: $378 for each calendar day of non-compliance where the record is reported 1 year or more, but less than 2 years after the required reporting date.
Tier 2: $756 for each calendar day of non-compliance where the record is reported 2 years or more, but less than 3 years after the required reporting date.
Tier 3: $1,512 (max rate) for each calendar day of non-compliance where the record is reported 3 years or more after the required reporting date. ^[7]

In addition to the above, the total maximum penalty amount for any single instance of noncompliance is now $551,880 applying the current 2025 adjusted inflation rates.

As for other matters, CMS, as part of its recent Section 111 webinar, advised that, in terms of the monetary CMPs amount the RRE must pay, this will be based on the effective CMPs inflation adjusted amount at the time CMS’s initial audit occurs. CMS explained that if there is a subsequent inflationary adjustment to the CMPs rates before the RRE makes payment, the amount the RRE will pay will be based on the adjusted CMPs amount in place at the time of CMS’s initial audit, and not the subsequently increased rate. Similarly, CMS also explained that, while there would be time which would pass between the occurrence of the initial audit and when a CMP would be formally assessed, the clock would stop ticking in terms of the daily penalty calculation as of the date the non-compliance was identified via the initial audit. In addition, as part of this webinar, CMS also confirmed that it will only accept CMPs payment via Pay.gov eBill.

Questions?

Please do not hesitate to contact the authors if you have any questions regarding the above, or to learn how Verisk can help you with your Section 111 reporting obligations.

[1] 91 Fed. Reg. 3665, Annual Civil Monetary Penalties Inflation Adjustment, (January 28, 2026), (amending 45 C.F.R. § 102.3). This inflation increase to NGHP Section 111 CMPs amounts was part of wide-scale general annual CMPs inflation adjustments applied to numerous other federal statutes as announced in the Federal Register at 91 Fed. Reg. 3665 (January 28, 2026) titled as “Annual Civil Monetary Penalties Inflation Adjustment.”

[2] Vought, Russell (2026, April 17). Memorandum to the Heads of Executive Departments and Agencies (M-26-11), Cancellation of Penalty Inflation Adjustments for 2026, Regarding the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. https://www.whitehouse.gov/omb/information-resources/guidance/memoranda/

[3] Vought, Russell (2026, April 17). Memorandum to the Heads of Executive Departments and Agencies (M-26-11), Cancellation of Penalty Inflation Adjustments for 2026, Regarding the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. https://www.whitehouse.gov/omb/information-resources/guidance/memoranda/

[4] Vought, Russell (2026, April 17). Memorandum to the Heads of Executive Departments and Agencies (M-26-11), Cancellation of Penalty Inflation Adjustments for 2026, Regarding the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. https://www.whitehouse.gov/omb/information-resources/guidance/memoranda/

[5] Vought, Russell (2026, April 17). Memorandum to the Heads of Executive Departments and Agencies (M-26-11), Cancellation of Penalty Inflation Adjustments for 2026, Regarding the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. https://www.whitehouse.gov/omb/information-resources/guidance/memoranda/

[6] Regarding the timing of recent CMPs inflation adjustment releases, the authors outline the following:

The “2022 maximum adjusted penalty” rates were issued in a March 2022 Federal Register update at 87 Fed. Reg. 15100, Annual Civil Monetary Penalties Inflation Adjustment, (March 17, 2022), (amending 45 C.F.R. § 102.3). This update, in pertinent part, noted increased the maximum adjusted penalty for Section 111 NGHP CMPs to $1,325. Id. at 15116.

The “2023 maximum adjusted penalty” rates were issued in an October 2023 Federal Register update at 88 Fed. Reg. 69531, Annual Civil Monetary Penalties Inflation Adjustment, (October 6, 2023), (amending 45 C.F.R. § 102.3). This update, in pertinent part, increased the maximum adjusted penalty for Section 111 NGHP CMPs to $1,428. Id. at 69548.

The “2024 maximum adjusted penalty” rates were issued in an August 2024 Federal Register update at 89 Fed. Reg. 64815, Annual Civil Monetary Penalties Inflation Adjustment, (August 8, 2024), (amending 45 C.F.R. § 102.3). This update, in pertinent part, increased the maximum adjusted penalty for Section 111 NGHP CMPs to $1,474. Id. at 64827.

The “2025 maximum adjusted penalty” rates were issued in a January 2026 update Federal Register update at 91 Fed. Reg. 3665, Annual Civil Monetary Penalties Inflation Adjustment, (January 28, 2026), (amending 45 C.F.R. § 102.3). This update, in pertinent part, increased the maximum adjusted penalty for Section 111 NGHP CMPs to $1,512. Id. at 3678.

[7] See, 88 Fed. Reg. 70363, Medicare Program: Medicare Secondary Payer and Certain Civil Money Penalties, (October 11, 2023), 42 C.F.R. § 402.105, and CMS’s NGHP Civil Money Penalties Webpage, Section: Penalty Amounts.