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February 20, 2014

Proposed Rule Would Clarify When an Employee Assistance Program Is Not Subject to the Affordable Care Act's Group Health Plan Mandates

Late last year, the Departments of Treasury, Labor, and Health and Human Services, which are responsible for implementing the Affordable Care Act1 (collectively, the “Departments”), published a proposed rule2 that would set forth criteria for when an employee assistance program (EAP) would not be considered a group health plan and, therefore, would not be subject to the Affordable Care Act’s group health plan mandates.3

Under the proposed rule, beginning in 2015, an EAP would not be subject to the Affordable Care Act’s group health plan mandates provided it satisfies all of the following requirements:

  • It does not provide “significant” medical care benefits.
  • The benefits under the EAP cannot be coordinated with benefits under another group health plan. For example, participants in the other group health plan must not be required to exhaust benefits under the EAP (e.g., a gatekeeper EAP) before an individual is eligible for benefits under the other group health plan.
  • No employee premiums or contributions may be required as a condition of participation in the EAP.
  • There is no cost sharing for benefits provided through the EAP.

Implications for Employers that offer EAPs

Under the proposed rule, employers can now have more certainty with respect to whether their EAPs are considered to be group health plans. This clarification is new, and will help employers understand what the EAP requirements will be moving forward.

Many EAPs may not fit within the proposed definition. Employers with that type of EAP may wish to revise EAP rules for 2014 and beyond in order to avoid having the EAP be subject to the Affordable Care Act group health plan mandates.

Comments Requested

Comments on the proposed rule are due on or before February 24, 2014.

The Departments ask for comments on whether a program that provides no more than 10 outpatient visits for mental health and substance use disorder counseling, an annual wellness checkup, immunizations, and diabetes counseling should be considered to provide “significant” medical care benefits.

Expected Timing for the Final Rule

The final rule is expected to be effective in 2015. Until then, sponsors of EAPs may rely on a good faith interpretation of existing rules. For 2014, employers may use a reasonable, good-faith interpretation of whether an EAP meets the “significant benefits” standard.

Starting in 2015, the EAP would have to meet the new standards in order to avoid the Affordable Care Act’s group health plan mandates.

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As with all issues involving the interpretation or application of laws and regulations, plan sponsors should rely on their legal counsel for authoritative advice on the interpretation and application of the Affordable Care Act and related guidance, including the proposed guidance summarized in this Capital Checkup. Sibson Consulting can be retained to work with plan sponsors and their attorneys on compliance issues.

 

1 The proposed rule was published in the December 24, 2013 Federal Register. (Return to the Capital Checkup.)

2 The Affordable Care Act is the shorthand name for the Patient Protection and Affordable Care Act (PPACA), Public Law No. 111-48, as modified by the subsequently enacted Health Care and Education Reconciliation Act (HCERA), Public Law No. 111-152. (Return to the Capital Checkup.)

3 The Affordable Care Act is the shorthand name for the Patient Protection and Affordable Care Act (PPACA), Public Law No. 111-48, as modified by the subsequently enacted Health Care and Education Reconciliation Act (HCERA), Public Law No. 111-152. The Affordable Care Act requires non-grandfathered group health plans to provide in-network coverage for an extensive list of preventive services without imposing any cost-sharing requirements. The lists are developed by the United States Preventive Services Task Force (USPSTF) and other groups. Lists of required preventive services are available on the healthcare.gov website. (Return to the Capital Checkup.)