QUESTION: Our company recently started offering an employee assistance plan (EAP). Is the EAP subject to ERISA? What other issues should we consider with respect to our EAP?
ANSWER: Whether your EAP is subject to ERISA depends on how it is structured and what benefits it provides. If your EAP provides medical benefits, it will likely be considered a welfare benefit plan subject to ERISA. Moreover, it will generally be considered a group health plan potentially subject to several other laws.
EAPs typically offer a wide-ranging set of benefits to address circumstances that might otherwise adversely affect employees’ work and health. Benefits may include short-term mental health or substance abuse counseling or referral services, as well as financial counseling and legal services. (For more details about EAPs, including the distinction between EAPs and wellness programs, see our Checkpoint Question of the Week.) An EAP is subject to ERISA if it offers a benefit listed in ERISA and meets the other ERISA criteria—generally, if it is a plan, fund, or program established or maintained by an employer to provide benefits to employees.
The category of ERISA-listed benefits most likely to be provided by an EAP is medical care or benefits. Mental health counseling, whether for substance abuse, stress, or other issues, is considered medical care. Accordingly, an EAP providing mental health counseling will be considered an ERISA plan, while an EAP that purely provides referrals and general information and is not staffed by trained counselors likely is not an ERISA plan. Even if an EAP primarily provides referrals, it still may be considered to provide medical benefits if the individuals handling initial phone consultations and making referrals are trained in an applicable field, such as psychology or social work. If the EAP provides any benefit subject to ERISA, then the EAP as a whole is subject to ERISA, even if it also provides non-ERISA benefits.
If you determine that your EAP is subject to ERISA, it should be evaluated for compliance with ERISA’s numerous provisions, such as plan document and SPD requirements, fiduciary duties, claims procedures, and Form 5500 filings. An EAP that is a group health plan will also be subject to COBRA and certain other group health plan mandates, including mental health parity. (For a discussion of COBRA issues for EAPs, see our Checkpoint Question of the Week.) But it might not be subject to other group health plan requirements—an EAP that meets specified criteria will be considered an “excepted benefit” not subject to HIPAA portability and certain Affordable Care Act requirements (see our Checkpoint Question of the Week). Also keep in mind that EAPs that receive medical information from participants—even if they only make referrals and do not provide medical care—should analyze compliance with HIPAA’s privacy and security rules.
For more information, see EBIA’s ERISA Compliance manual at Section VI.J (“Special Issues: Plans Providing Medical Benefits (aka Group Health Plans)”). See also EBIA’s Health Care Reform manual at Section V.L (“Employee Assistance Programs (EAPs)”); EBIA’s HIPAA Portability, Privacy & Security manual at Section XXII.C (“What Are ‘Health Plans’ and ‘Group Health Plans?’”); and EBIA’s Group Health Plan Mandates manual at Section IV.K (“Employee Assistance Programs (EAPs)”).
Contributing Editors: EBIA Staff.