If an employee assistance program (“EAP”) provides counseling for substance abuse, stress, depression, and similar health problems, the Labor Department and IRS regard it as a group health plan.  Unless the EAP qualifies for an exception, it will have difficulty complying with the group health plan coverage requirements and other mandates.

Recent guidance from the federal regulatory agencies gives many EAPs a “free pass” for 2014, and creates new compliance options for 2015 and beyond.  In order to keep their EAPs in compliance after 2014, employers might need to make design changes or satisfy other new requirements.  EAP sponsors should take this opportunity to review their compliance options and develop a compliance strategy.
Continue Reading Compliance Strategies for Employee Assistance Programs

On November 26, 2012, the IRS and Departments of Labor and Health and Human Services published in the Federal Register proposed regulations that would permit group health plans to provide greater incentives for participation in wellness programs.  The proposed regulations include a welcome implementation of statutory changes that were made by the Affordable Care Act, but they leave unanswered important questions about compliance with the Genetic Information Nondiscrimination Act of 2008, as amended (GINA) and the Americans with Disabilities Act, as amended (ADA).  Employers putting wellness programs in place should be mindful of the possibility that a program might comply with the proposed regulations but still violate a requirement of GINA or the ADA.

If finalized, the proposed regulations will be effective for plan years beginning in 2014 or later–the same effective date as the changes to the statute.  Until then, existing regulations that were issued in 2006 continue to apply.  Comments on the proposed regulations are due by January 25, 2012.
Continue Reading Proposed Regulations Will Permit Greater Incentives for Participation in Wellness Programs

Wellness programs have become a popular tool for employers to address ever-increasing employee healthcare costs. However, wellness program designs are limited by the requirements of the Americans with Disabilities Act (ADA), among other laws.  A recent decision by the Eleventh Circuit in Seff v. Broward County may make it easier for employers to provide wellness programs.  In that decision, the court held that Broward County’s wellness program did not violate the ADA, even though employees who refused to participate were subject to financial penalties.  The court concluded that the program was not subject to the ADA’s prohibition on required medical examinations and disability-related inquiries because the wellness program falls within a safe harbor for insured plans.  The safe harbor covers a program that is: 

  • offered under the terms of a bona fide benefit plan,
  • based on underwriting risks, classifying risks, or administering risks, and
  • not inconsistent with state law.  

 
Continue Reading Wellness Program Non-Participation Penalty Does Not Violate ADA, Says Eleventh Circuit