Is an employ­ee assis­tance pro­gram (EAP) a COBRA-eli­gi­ble benefit?

Employ­ee assis­tance pro­grams (EAPs) that offer med­ical ben­e­fits such as direct coun­sel­ing and treat­ment, rather than just refer­rals for coun­sel­ing and treat­ment, are reg­u­lat­ed under the Employ­ee Retire­ment Income Secu­ri­ty Act (ERISA) and there­fore sub­ject to report­ing and notice require­ments under the act. Addi­tion­al­ly, if the EAP pro­vides direct coun­sel­ing or oth­er “med­ical ben­e­fits” to its par­tic­i­pants, the plan is sub­ject to the Con­sol­i­dat­ed Omnibus Bud­get Rec­on­cil­i­a­tion Act (COBRA). If the EAP does not pro­vide ser­vices direct­ly, but pro­vides only refer­rals and facil­i­ta­tion of obtain­ing these ser­vices, then it is not con­sid­ered a group health plan and is not sub­ject to COBRA reg­u­la­tions. If the plan is sub­ject, the applic­a­ble COBRA pre­mi­um will be based on cost to pro­vide ser­vice and employ­ers may rely on the actu­ar­i­al method. The applic­a­ble pre­mi­um can include an addi­tion­al admin­is­tra­tive fee of 2 per­cent allow­able under the act.

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