What Employers Need to Know About COBRA & Employee Assistance Programs

Generally, Employers know about basic COBRA administration requirements for Medical coverage.

However, there is often oversight of less common plans subject to COBRA, causing Employers to fall into costly lawsuits, or be subject to hefty government penalties. One such plan is the “EAP” or Employee Assistance Program.
By understanding what an EAP (Employee Assistance Program) is, as well as how it should be handled in terms of COBRA administration, will help keep your company sponsored benefits on track.
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What is an EAP? What are the Coverages?
While Employee Assistance Programs vary from plan to plan, many provide support for serious issues employees may face such as mental health programs, health and caregiving, counseling, family services, and even financial services.

​The Employee Assistance Program is purposed to provide employees with support for issues that are typically not covered by standard health insurance policies but are still related to the employees’ general good health.
A good EAP connects employees with adequate resources for handling personal challenges that can impact their work or work-life balance. EAP coverage is most often geared toward the individual employee, but these programs may also help members in a covered household such as a spouse, domestic partner, child, or other eligible dependents. Employee Assistant Programs typically involve on-call counselors and referrals to resources that can readily help employees work through difficult challenges.
Why are EAPs COBRA Eligible?
Because the Employee Assistance Program coverage pertains to your employees’ overall health, just as dental, vision, and other health-related benefits, it is considered a plan subject to COBRA. Consequently, it is also considered a plan subject to many state continuation programs (mini-Cobra) when Federal COBRA does not apply.
EAPs cover health issues that even former employees may face, after the employees have experienced a COBRA Qualifying Event. These issues commonly covered by an EAP can include:

• Navigating career changes.
• Budgeting services and financial advice.
• Substance abuse support for those struggling with chemical dependency, addiction, and more.
• Counseling for those who need confidential support for family, personal, and work-related issues.
• Health management and caregiving for those who need support with diseases such as diabetes, or for fitness, caregiving, nutritional guidance, and more.
• Mental health issues such as grief, anxiety, depression, and crisis.

How Does COBRA & EAP Work?
When a qualifying event occurs, employers should offer the Employee Assistance Program to the employee. If there was a monthly premium associated with the plan, this should be disclosed in the premium and coverage information within the COBRA Notice of Right to Elect. If there was no premium associated with the benefit (as many employers cover this at no cost to employee), then this detail should be disclosed as well within the COBRA Election Notice.
From there, the Employee (qualified beneficiary) would have the opportunity to elect COBRA continuation coverage and may elect the Employee Assistant Program along with other health coverage he or she may have been enrolled in at the time of the qualifying event.
Employers should discuss their COBRA/EAP transition process with their EAP administrator or provider, so that they know what to expect when a COBRA event occurs.  For example, does the administrator cancel the coverage immediately upon the employee’s qualifying event such as termination of employment? Or does the EAP administrator cease coverage immediately upon notice of a qualifying event? Another question to ask the EAP provider is how they should be notified of COBRA events and what is the deadline?
These are all excellent ways to become more familiar with how your company’s Employee Assistance Program will operate for COBRA participants.
Once a Qualified Beneficiary elects (and pays any applicable premium) for the COBRA covered EAP, Employers should be prepared to verify or reactivate coverage status with the EAP provider.
From there, tracking the EAP for the remainder of the COBRA participant’s eligibility period, or until the participant voluntarily drops coverage will be the responsibility of the Employer or the Employer’s COBRA third party administrator, such as CobraHelp.
Once COBRA ends, the EAP administrator should be notified of the termination so that the coverage can be canceled.

If you are an Employer or Agent needing assistance with managing COBRA Employee Assistance Program responsibilities for your enrollees, please know that CobraHelp can help you! Contact us today.