Employee Assistance Programs (EAPs) | Compliance Considerations for Employers

Employee Benefits

Employee Assistance Programs (EAPs) | Compliance Considerations for Employers

The term “employee assistance program” (EAP) is not defined under federal law, and the specific benefits and services offered under these programs will vary from employer to employer. For the most part, EAPs are employment-based programs that offer employees benefits ranging from financial planning and childcare to substance abuse counseling and mental health support. EAP benefits are typically provided through third-party EAP vendors and can be offered as stand-alone programs or coordinated with an employer’s wellness program. Life and disability carriers frequently include EAP programs as a value-added benefit in conjunction with a long-term disability (LTD) policy.

When determining an employer’s compliance obligations pertaining to EAPs, the most important factor will be whether the EAP provides medical care/benefits.


EAPs Providing Medical Benefits

To the extent an EAP provides medical benefits, and assuming the plan sponsor is otherwise subject to ERISA1, the EAP will be an employee welfare benefit plan subject to ERISA’s reporting and disclosure requirements. ERISA section 3(1) defines the term “employee welfare benefit plan” as:

“any plan, fund, or program…established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment, or vacation benefits, apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legal services, or (B) any benefit described in section 302(c) of the Labor Management Relations Act, 1947 [29 USC §186(c)] (other than pensions on retirement or death, and insurance to provide such pensions).”

Whether a particular EAP provides medical benefits will depend on the services offered through the program and the circumstances in which they are provided. For example, an EAP that offers counseling sessions (regardless of the number of sessions) by a trained professional will likely be considered to offer medical benefits and therefore be subject to ERISA.2 On the other hand, an EAP that provides only referrals based on publicly available information and is staffed by personnel with no special training in counseling or a related discipline most likely does not provide medical benefits and, therefore, would not be subject to ERISA.3

Employers must consult with their employee benefits attorney for a legal opinion on whether their specific EAP is subject to ERISA.

1 The plan sponsor will be subject to ERISA if it is a private for-profit or not-for-profit entity that does not fall under the governmental/church exemption under ERISA.
2 “It has consistently been the view of the Department that benefits for treatment of drug and alcohol abuse, stress, anxiety, depression and similar health and medical problems constitute “medical” benefits or “benefits in the event of sickness” within the meaning of [ERISA] section 3(1).” ERISA Opinion Letter 91-26A , 07/19/1991.
3 ERISA Opinion Letter No. 91-26A

Regulatory and Legislative Strategy Group