On October 1, 2014, the Departments of Health and Human Services (“HHS”), Labor (“DOL”) and Treasury (collectively, the “Departments”) published regulations finalizing a proposed amendment to the “excepted benefit” rules, i.e., the rules that govern when certain types of benefits are exempt from HIPAA’s portability rules as well as various requirements under ERISA (including applicability of the Mental Health Parity and Addiction Equity Act) and the Affordable Care Act (“ACA”), including the ACA’s market reforms (such as the prohibition on lifetime and annual limits, etc.). These final rules largely adopted proposed rules from December 2013, with a few clarifications and changes.
After the enactment of the ACA, various stakeholders became increasingly concerned about whether or not an employee assistance program (“EAP”) would be considered to be a “group health plan” under the ACA, and thus subject to all of the ACA’s market reforms. Because the benefits provided under an EAP are generally very limited, most (if not all) EAPs would have difficulty meeting these market reforms (including, particularly, the ACA’s prohibition on annual dollar limits). The final rules largely adopted the provisions of the proposed rule that specify that EAPs will be considered to be excepted benefits (and thus not subject to the ACA’s market reforms) if they meet four criteria (which, the Departments make clear, are intended to ensure that EAPs are supplemental to other coverage offered by employers):