29 Oct Employee Assistance Programs under the Affordable Care Act

Employee Assistance Programs (EAPs) are designed to help employees prevent, identify and resolve various personal issues and matters. Many employers include EAPs in their benefits packages to enhance employee effectiveness and maintain workplace productivity. In addition to providing benefits like pre-paid legal, crisis intervention or professional development services, EAPs commonly provide health-related benefits, such as mental health, substance abuse and wellness services. Does this mean that they must comply with the Affordable Care Act?

According to final regulations issued by the Departments of Labor, Treasury and Health & Human Services on October 1, 2014, the answer is…maybe.

If an EAP qualifies as an excepted benefit, it will generally be exempt from the ACA’s requirements. Otherwise, the EAP must incorporate the market reforms mandated by the ACA, such as no lifetime or annual limits. Under the final regulations, an EAP must satisfy four requirements to qualify as an excepted benefit.

1. The EAP cannot provide significant benefits in the nature of medical care.

The amount, scope and duration of services are considered when determining whether an EAP meets this requirement. For example, an EAP that provides only limited, short-term outpatient counseling to substance abusers without requiring prior authorization or review for medical necessity, will not be considered an EAP that provides significant benefits in the nature of medical care. Alternatively, EAPs providing disease management services (lab testing, counseling, prescription drugs, etc.) for chronic conditions, such as diabetes, do provide significant benefits in the nature of medical care.

The Departments may provide additional clarification in the future regarding when a program provides significant benefits in the nature of medical care.

2. Benefits provided by the EAP cannot be coordinated with benefits under another group health plan.

This requirement has two elements:

• Participants in the other group health plan must not be required to use and exhaust benefits under the EAP (making the EAP a “gatekeeper”) before becoming eligible for benefits under the other group health plan.
• Eligibility for EAP benefits must not be dependent on participation in another group health plan.

3. Employee premiums or contributions cannot be made a condition of participation in the EAP.
4. The EAP cannot impose any cost-sharing requirements (co-pay, etc.).

These final regulations apply to group health plans with plan years beginning on or after January 1, 2015. Until then, the Departments will consider EAP benefits meeting the conditions of the 2013 proposed regulations or these final regulations to qualify as excepted benefits.

At Setnor Byer Insurance & Risk, we are committed to guiding you through the ACA’s market reforms. Check back with us periodically for future informational updates about the Affordable Care Act.

If you have specific questions about the ACA or if you are ready to take action and would like to see how Setnor Byer Insurance & Risk can help, contact us.

If you’d like to subscribe to our weekly newsletters please click here.