Do COBRA laws apply to your EAP?

Is your employee assistance program (EAP) subject to federal COBRA laws? Like most laws associated with the continuation of health benefits after employment terminations, the answer can be complicated. But never fear: We’re happy to help unpack the facts for you.

An EAP is subject to COBRA rules if it meets the definition of a group health plan — meaning your company maintains or supports the plan, and the plan provides some type of medical care. This is applicable to your private-sector company if you employ 20 or more people. Keep in mind, your company doesn’t have to contribute any funding to the EAP for it to be considered an employer-sponsored health plan.

The Society for Human Resource Management (SHRM) has a great example of how an EAP would be considered an employer-sponsored health plan:

An employee who exhibited a dramatic change in behavior is referred to the company’s EAP. The employee uses the EAP hotline and engages in a discussion with a psychologist who schedules an appointment with her. In this scenario, the company’s EAP meets the criteria of an employer-sponsored health plan because the employee is receiving counseling from a trained professional. If, however, the EAP hotline only gave the employee a list of psychologists in her area, it would not meet the criteria for a health plan.

There are some exceptions and rare exclusions, as well. The law applies to state and local governments, but not federal government plans. Churches and church-related organizations are exempt.

Many states have their own “mini-COBRA” laws, and Nebraska’s mini-COBRA laws cover more individuals, but for less time. The law is expanded in the sense that any company with 2-19 employees must also provide coverage, but the amount of time they must remain covered is shortened from 18 months in the federal law to six months in Nebraska law.

If you have questions about COBRA laws related to your EAP or inquiries about what qualifies as a company-sponsored health plan, we at Omnify are always happy to help! Shoot us an email or give us a call at 844.472.6567.