ERIC Comments On Proposed Excepted Benefits Rule Center Around EAPs

Including employee assistance plans (EAPs) as a limited excepted benefit was a step in the right direction, according to the ERISA Industry Committee (ERIC) in recent comments to the Department of Labor (DOL) about proposed regulations that would amend the definition of limited excepted benefits for purposes of complying with the Patient Protection and Affordable Care Act (ACA). However, ERIC has requested that the DOL provide further clarification in the final rules about implementing an EAP as an excepted benefit.

In December 2013, the DOL, the Department of Health and Human Services, and the Treasury Department issued proposed regulations that would amend the definition of limited excepted benefits, which are generally exempt from the ACA market reform requirements. The rules would be effective for plan years starting in 2015.

EAPs. The proposed regulations set forth criteria for an EAP to qualify as an excepted benefit. Benefits provided under EAPs are excepted benefits if they satisfy all of the following requirements: (1) the program does not provide significant benefits in the nature of medical care; (2) the benefits under the EAP cannot be coordinated with benefits under another group health plan, as follows: (a) participants in the other group health plan must not be required to exhaust benefits under the EAP (making the EAP a gatekeeper) before an individual is eligible for benefits under the other group health plan; (b) participant eligibility for benefits under the EAP must not be dependent on participation in another group health plan; and (c) benefits under the EAP must not be financed by another group health plan; (3) no employee premiums or contributions may be required as a condition of participation in the EAP; and (4) there is no cost sharing under the EAP.

ERIC recommendations. ERIC recommends that the final regulations provide a safe-harbor definition of “significant benefits.” ERIC indicates that the safe-harbor should apply any limits on visits separately to each issue rather than in the aggregate.

In addition, ERIC recommends that the final rules provide that any program offering wellness benefits, including a disease management program, will be eligible to be considered as offering “excepted benefits” under the exclusion for EAPs that do not offer significant medical benefits, provided the wellness program otherwise meets the requirements for the EAP exclusion. Furthermore, ERIC believes that the exclusion for diabetes counseling should be broadened to include other types of counseling programs aimed at chronic diseases.

Finally, ERIC recommends that the final regulations clarify that EAPs that are excepted benefits are exempt from the requirements to continue coverage under COBRA, as it requires companies to devote resources to provide a benefit that is rarely, if ever, used.

For more information, visit http://www.eric.org/uploads/doc/health/ERIC-Excepted%20Benefits%20Comment%20Letter.pdf.

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