What penalty and interest applies to HIV death benefits when filed late?

• A. 10% penalty and interest
• B. 0%
• C. 5%
• D. 15%

Answer: (A)

In California SIP rules, late filing of death benefits carries a penalty and interest to encourage prompt submissions and to compensate for the delay. The standard penalty is ten percent of the benefit amount, plus interest on the late payment from the date the benefit was due until payment is made. For example, if the due death benefit is $100,000 filed late, you’d owe $10,000 as the penalty plus interest on the $100,000 for the period of delay. The interest rate is determined by the plan or applicable statute. This combination (10% penalty plus interest) is designed to deter late filing and to make the plan whole for the delay.