EAP & COBRA

dhildebrand · January 2003

When offering COBRA benefits do you need to offer the EAP program as a COBRA benefit? If yes, do you charge the employee a separate fee? This pertains more so to EAPs which are not part of insurance or disability plen.

awilliams · January 2003

This question crops up a lot. The answer is: it depneds.

If your EAP is an ERISA plan, then it is subject to COBRA requirements. Basically, if it is considered a "group health plan" it will be subject to ERISA. If it is a phone in service where the employee receives a referral to a provider, it is probably not a group health plan, and not subject to COBRA. However, if the EAP itself provides services, such as counselling, telephone, or in person, it is probably subject to COBRA.

Anne Williams
Attorney Editor
M. Lee Smith Publishers, LLC

Lori B · January 2003

We offer EAP as part of COBRA. We charge $1.50/month for it. No one has ever elected to continue it though.

GLC · January 2003

I have a question about how to handle the EAP under COBRA. We offer our employees EAP services and use 3 EAP providers. We pay them an hourly rate between $80-$95. Employees get up to 3 sessions that we pay 100% for. We have now added EAP on our COBRA notices. Any suggestions on what we should charge as the monthly EAP premium under COBRA, that will be the least costly for us?

dhildebrand · January 2003

Good question! I work for an EAP and we are just realizing EAP can be covered under COBRA. Our program is sold on a per ee pr yr basis, therefore we can use that same cost. Ex: $20 per employee per year so the ee would be offered the COBRA rate of 20/12 = $1.66 + (% allowed to be added) per month. I am not sure how to figure it on a fee-for-service basis?! Dave

EAP & COBRA

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