Nearly 1 in 5 U.S. adults has a mental illness of some kind, according to the National Institute of Mental Health. The Centers for Disease Control and Prevention reports that 11.2% of people 18 and older regularly experienced anxiety in 2019. Another 4.7% had symptoms of depression.
Mental health issues and other personal problems can negatively impact many aspects of a person’s life, including their work performance. Employees experiencing substance use disorders, family conflict, and financial or legal problems may have difficulty completing essential job functions. During a time of pandemic and economic uncertainty, employees are facing additional hardships such as health concerns and juggling childcare with work responsibilities.
When left unaddressed, these issues can hurt productivity, engagement, and communication with colleagues. Employers often find themselves looking to promote a healthy work environment while assisting employees who may be struggling. One solution many companies have turned to is a work-based intervention known as an employee assistance program, or EAP. An EAP offers a suite of services intended to help employees address a range of problems that may affect their work. Managers must also ensure compliance with applicable laws and regulations when selecting and implementing an EAP for their employees.
How Employee Assistance Programs Work
Many EAPs include short-term counseling to help with matters that affect job performance including stress management, work-life balance, and grief. Employees may also have access to legal or financial advice, health and wellness coaching, and assistance in dealing with critical incidents at work. When appropriate, EAP counselors may refer employees to local mental health or substance abuse providers for additional assistance. Managers may receive training on how to identify and address behavioral, health, and job-related issues an employee may be dealing with. Services are typically provided free of charge to employees.
Some large employers establish in-house EAPs with professional counselors and coaches onsite. Many small and medium-sized companies contract with external EAP vendors who provide services online, through a toll-free number, or through local in-person counseling. Counselors, coaches, and other professionals providing EAP services must meet all necessary training, certification, and licensing requirements. Employers must consider how an EAP would fit within the organization’s health benefit structure, drug policy, budget, and workplace culture.
ERISA
The Employee Retirement Income Security Act of 1974 (ERISA) sets minimum standards for employee welfare benefit plans offered by private employers. Such plans may provide medical, surgical, or hospital benefits. Plans must comply with fiduciary rules, claims procedures, and plan document requirements set forth under ERISA.
Depending upon the services included, an EAP may constitute a welfare benefit plan and be subject to ERISA requirements. An example would be counseling for mental health or substance abuse, performed by licensed mental health providers. An EAP which merely provides short-term counseling or referrals to outside medical professionals, and does not offer medical benefits in the event of employee illness, may fall outside of ERISA regulations. It is possible for an EAP to include some services that are subject to ERISA and others that are not.
COBRA
The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows employees to continue group health benefits for a limited time under some circumstances. Qualifying circumstances include voluntary or involuntary job loss, reduction in work hours, transition between jobs, death, divorce, and other life events.
EAPs that merely provide referrals are not considered group health plans under COBRA. Those which provide health care must provide continuation coverage in compliance with COBRA requirements. COBRA is only required for that portion of an EAP that includes health benefits, such as counseling for mental health or substance abuse. It is not required for other EAP benefits such as financial coaching or legal advice.
Excepted Benefits Under the Affordable Care Act
An EAP may qualify as an excepted benefit under the Affordable Care Act of 2010. Excepted benefits are not subject to the ACA’s dollar limits, and there is no penalty on employers for not meeting minimum essential coverage. Participants in excepted benefits are not precluded from receiving tax credits for health insurance purchased under the ACA.
In order to be considered an excepted benefit, the EAP must meet four criteria. First, it must not provide significant medical care benefits. EAPs that include only limited, short-term counseling and referrals would generally satisfy this test. Services such as lab testing, long-term counseling, or prescriptions for disease management would be considered significant medical benefits and would not be excepted.
Second, participants in a group health plan must not be required to exhaust their EAP benefits before accessing plan benefits. This provision applies to employers with 50 or more employees whose group health plans include mental health and/or substance abuse coverage. Third, premiums must not be required for participation in an EAP. Finally, the EAP may not impose cost-sharing requirements on participants.
Confidentiality
Federal law prohibits the unauthorized release of an employee’s medical or substance abuse records. Under most circumstances, EAPs may not release an employee’s information to the employer without signed consent. Employers may receive generalized reports regarding EAP services used and types of problems addressed, as long as individual employee information is not disclosed. When an employee receives mandatory counseling due to disciplinary issues, supervisors may receive updates on the employee’s progress and whether they have attended all required sessions.
Mandatory Referrals
In some instances, mandatory counseling may be warranted in response to a documented performance problem or if the employee appears hostile, suicidal, or depressed. As noted above, the employer may receive feedback from the EAP with a signed release from the employee. Information may include updates on the employee’s attendance, compliance, and prognosis. If an employer is concerned about a risk of workplace violence, the employee may be prohibited from returning to work until they receive a “fitness for duty” certification from a health care provider.
The Americans with Disabilities Act, along with some state laws, protects individuals who have a disability or who are perceived as having a disability. Employers must at all times avoid taking adverse actions against an employee based on a disability or perceived disability, including mental illness.
An EAP can enable employees to work to their full potential. By addressing employee mental health concerns, employers may see reduced absenteeism and better engagement on the job. Researchers have also found that employees who are happy at work are more productive, which may translate into higher sales.
The attorneys at McMahon Berger have helped numerous employers in implementing employee benefits that promote wellness and boost business performance. Reach out to us to schedule an appointment.
