Compliance FYI: Are Your EAPs and Wellness Programs Covered
Many employers sponsor employee assistance programs (EAPs) and/or wellness programs. These programs may be extremely beneficial to participating employees, but employers must consider the compliance requirements that accompany the offer of an EAP and/or wellness programs. One specific compliance obligation would be to meet the requirements of the Employee Retirement Income Security Act (ERISA). However, as a threshold manner, employers must first determine if their EAP or wellness program is subject to ERISA.
Employee Assistance Coverage
EAPs provide employees with a wide variety of services to help prevent or address problems that could negatively impact an employee’s health or job performance. ERISA applicability will depend on the type of services provided by the EAP. Generally, an EAP will be required to comply with ERISA if the services provided qualify as “medical care” under ERISA.
“Medical care” is broadly defined under ERISA as amounts paid for:
- The diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body;
- Amounts paid for transportation primarily for and essential to medical care referenced in the point above; and
- Amounts paid for insurance covering the medical care referenced in the two points above.
Many EAPs allow participants to meet with trained counselors regarding mental or physical health issues. These types of services would most likely be considered medical care therefore making the EAP subject to ERISA. This is the case even if only some of the benefits provided by an EAP are medical care. If the EAP provides any benefits subject to ERISA, the entire EAP must comply with ERISA’s requirements.
EAPs that are limited to providing general information about referrals and are not staffed by trained counselors most likely do not provide medical care and are not subject to ERISA as a result.
Wellness Programs
Many employers establish wellness programs to improve the health and well-being of their employees. Wellness programs take many forms and provide a wide range of services, and just like with EAPs, the type of services and benefits provided by a wellness program determine whether it is subject to ERISA.
A wellness program that provides medical care is subject to ERISA. A wellness program is more likely to provide medical care if it goes beyond the encouragement of healthy living and provides services such as cholesterol screenings, flu shots, and physical examinations. Wellness programs that merely promote a healthy lifestyle likely will not provide medical care and not be subject to ERISA.
Key Takeaways:
Employers who offer EAPs or wellness programs as part of their welfare benefit plans would be well served to review the benefits offered under those programs and consult with their benefits attorney to obtain a legal opinion regarding the applicability of ERISA.
The information provided is a summary of laws and regulations relating to employee benefit plan compliance. This information should not be construed as legal advice. In all cases, employers should consult with their own legal counsel.
