Plans subject to COBRA.
Are employee assistance programs (EAPs) subject to COBRA? "It depends," says Shelly Winson, an instructor at A.E. Roberts Company. She explained that COBRA applies to welfare plans that "treat illnesses of the body, mental or physical, in some way." Therefore, if your EAP is a basic toll-free referral service that provides employees with contact numbers to receive legal, financial or psychological assistance, then it is not covered by COBRA, since diagnosis of an illness or injury is not included. However, if your EAP offers an employee several free sessions with a family counselor, then the EAP does provide a health benefit and the employer must offer COBRA. This issue is "tricky," said Winson, since an employer may have to offer COBRA for the EAP, even if the employee is not covered by the group health plan.
Likewise, whether COBRA applies to smoking cessation programs is unclear. For example, a program in which a doctor lectures onsite and gives employees prescriptions to treat nicotine addiction is probably covered by COBRA since it provides treatment for an illness.
Tips for surviving a COBRA audit.
To improve the chances that your COBRA programs survives the scrutiny of a DOL auditor, Winson listed several helpful hints:
- communicate directly with spouses and dependents whenever necessary;
- allow qualified beneficiaries the entire grace period to pay premiums;
- consistently log all policies and administrative procedures, including attendance at training and seminars;
- review all notices to assure that they comply with the most recent law and regulations; and
- have your program audited at least every 2 to 3 years to show good faith compliance.
Cite: Shelly Winson, an instructor at A.E. Roberts Company, speaking at a recent COBRA compliance seminar in Chicago.
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The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion.