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bshanbrom

Cobra and EAP plans

4 posts in this topic

Do employers who offer EAP plans need to make the EAP available to Cobra beneficiaries? Does it matter whether it is a phone line only plan vs. 3 session EAP?

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I have never heard of an EAP plan falling under COBRA.

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EAPs plans are covered under COBRA with the thinking that they are a health benefit plan. The last two COBRA seminars i attended, while not really saying "yes, you need to offer your EAP program," did strongly "suggest" doing so due to discrimination of offering medical and dental, but not mental coverage.

I don't know if it matters about what kind of a plan it is, we had a very hard time coming up with the rates because we paid per employee per month, not per session. We found out what the rate would be if it were per session, mulitplies per the number of sessions they would get as an employee, added our 2 percent, and divided it by 12 to get a monthly cost.

Look at how much it costs you and how much the company you are outsourcing it to would charge for the same service.

We decided to offer it because if someone was going through something stressful that we were not aware of and they terminated employment, either voluntary or involuntary, we did not want them to cut them off from the benefit. Plus, once we got it rolling, it was not that difficult to administer.

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The DOL has issued several advisory opinions that EAPs who provide counseling services are employer maintained health care plans. In labeling EAPs an employee welfare benefit plan providing health benefits, it becomes subject to COBRA.

If the plan is strictly a referral service, i.e., no counseling is given, only referrals to health care professionals at the request of the employee, then it is not considered an employee benefit plan providing health care services since the employee.

Unfortunately, there is no written guidance on how to determine whether an EAP is subject to COBRA or not and it appears the determination is being left up to the discretion of the sponsor.

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