Many businesses now offer Employee Assistance Programs (EAPs) to support employees with mental health, substance abuse, and financial challenges commonly seen today.
EAPs are voluntary and confidential workplace programs that assist employees and their families with issues affecting mental health and job performance. These may include stress, grief, depression, family issues, financial challenges, and substance abuse.
If your company is considering or already has an EAP, it’s crucial to ensure its compliance.
Start with ERISA
Federal laws may impact EAP compliance, starting with the Employee Retirement Income Security Act (ERISA). The ERISA covers key compliance aspects, such as creating a plan document, performing fiduciary duties, and filing Form 5500 with the IRS.
While the ERISA is often associated with healthcare and retirement plans, it can also apply to EAPs, depending on the program's structure and benefits. If an EAP offers mental health counseling, for instance, it will fall under ERISA. However, EAPs that only provide referrals and general information without trained counselors will not.
A rule of thumb to follow: If an EAP offers any ERISA-related benefit, the entire program must comply with ERISA.
Check Other Regulations
EAPs classified as group health plans may also need to follow the Consolidated Omnibus Budget Reconciliation Act (COBRA) and other health plan rules, such as mental health parity. Additionally, if an EAP collects medical information, even for referrals, it must comply with HIPAA privacy rules.
Some EAPs may fall under Affordable Care Act (ACA) requirements if they provide medical care like mental health counseling or other "group health" benefits. This would subject them to ACA rules on coverage, reporting, and benefits. However, EAPs that meet specific criteria may qualify as “excepted benefits,” exempt from certain ACA and HIPAA regulations. To be considered excepted, an EAP should provide limited medical services, avoid cost-sharing, and not offer substantial medical care directly.
Consult with Experts
EAPs are increasingly common, especially with growing awareness of mental health. If you’re considering one, consult an attorney to review compliance. Contact us for help with tracking costs and understanding tax impacts.