EAPs as Excepted Benefits

Posted December 17, 2014 Company News

Four conditions must be met in order for Employee Assistance Programs (EAPs) to be categorized as excepted benefits for plan years beginning on or after January 1, 2015, according to final regulations issued by the IRS, DOL, and HHS.
Plan sponsors must understand the criteria since EAPs classified as “non-excepted” coverage are subject to the Affordable Care Act (ACA) market reform provisions, payment of the Patient-Centered Outcomes Research Institute (PCORI) fees, and remittance of the Transitional Reinsurance fee.

Condition 1
An EAP cannot provide “significant benefits in the nature of medical care.” The preamble suggests that an EAP providing only limited, short-term, outpatient counseling for substance use disorders, without requiring prior authorization or medical necessity review, would not provide significant benefits in the nature of medical care. While the exact definition of “significant” is undetermined, it has been made clear that “amount, scope and duration of covered services” should be taken into account.
Condition 2
Benefits offered by the EAP cannot be coordinated with benefits under another group health plan and participants cannot be required to exhaust EAP benefits before being eligible for benefits under another group health plan. Additionally, eligibility for benefits under the EAP cannot be dependent on participation in another group health plan.
Condition 3
The EAP must be 100% paid by the employer.
Condition 4
Participants cannot be required to participate in any cost-sharing for the benefits received. This means that the plan must not charge co-pays, deductibles, or coinsurance.

 


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