When is an EAP subject to COBRA?

Certain elements must be present for an employee assistance program (EAP) to be considered a COBRA-covered benefit. Not all EAPs are subject to COBRA. Plan sponsors should take care in determining which plans are subject to COBRA and comply accordingly. Also, remember that plans sponsored by a church are not typically subject to COBRA.

In general, COBRA applies to group health plans that provide medical care or health care. So, if the EAP provides employees (and spouses, if eligible under the EAP) coverage for licensed health providers that assist in diagnosing and prescribing treatment related to the individual’s health condition, then the plan is likely subject to COBRA. This would also generally include EAPs staffed with trained counselors (internal or outside providers) who provide some type of treatment that would generally constitute medical care. This is true regardless of whether the employer pays the full EAP premium for active employees.

However, EAPs typically also provide other non-health care benefits (i.e., financial or legal counseling). Those non-medical benefits should be separated from the COBRA offering since they are not a health benefit.

In summary, if the EAP is found to be providing medical care, it is treated as any other benefit subject to COBRA. The employer may charge up to 102 percent of the cost; coverage would need to be offered to those covered on the day before the qualifying event (including divorced spouses, if applicable); and coverage may be continued for the full applicable COBRA coverage period (i.e., 18, 29 or 36 months).