EAPA trying to ensure EAPs dont't run afoul of new health savings accounts.

The Employee Assistance Professionals Association is working with Internal Revenue Service (IRS) officials to ensure that workers who qualify for health savings accounts do not lose access to EAPs.

Heath savings accounts (HSAs), which were created under the Medicare prescription benefit legislation signed into law in December 2003, allow employers and employees to contribute pre-tax money to pay for future medical expenses. Individual workers own their accounts and keep them even if they lose or change jobs. Money invested in the accounts can be carried over from year to year.

To be eligible for an HSA, an employee must be covered by a "high deductible health plan (HDHP)," defined as a health insurance plan with a minimum deductible of $1,000 for individual coverage or $2,000 for family coverage and annual out-of-pocket expenses (including deductibles and co-pays) not exceeding $5,000 for individual coverage or $10,000 for family coverage. An employee cannot be covered by other health insurance of be eligible for Medicare.

EAPA leaders are concerned that the IRS, in writing guidelines to determine eligibility for HSAs, may define EAPs as health plans. If so, an employee eligible for an EAP would not be eligible to establish an HSA.

In comments submitted to the IRS on May 14, EAPA Chief Executive John Maynard argued that defining EAPs as health plans would defeat the purpose of establishing HSAs.

"Despite their value, if EAPs are not allowed to co-exist with eligibility for HSAs and HDHPs, employers will be faced with eliminating their EAPs or not offering HDHPs," Maynard stated in a cover letter. "This would be an unfortunate, and clearly unintended, setback to the overall goals of reducing healthcare costs and improving workplace productivity."

The cover letter also emphasized that EAPs exist to serve the work organization and address many concerns that are not medical or health-related in nature.

"Most personal concerns addressed by EAPs are not medical issues at all," Maynard stated. "They include financial, legal, marital, child care, elder care, interpersonal conflict, stress, and other issues of living. Employees and family members with these concerns benefit most from referral to non-healthcare resources. Since problems tend to cluster and overlap, one of the significant benefits of an EAP is its ability to help individuals sort out the healthcare from the nonhealthcare issues and refer the individuals to appropriate multiple resources for needed assistance."

The cover letter concluded by asserting that EAPA believes EAPs are not health plans and thus pose no conflict for HDHPs, but that if the IRS decides to classify them as such, they should fall within the "safe harbor" for preventive care benefits (under Section 223(c)(2)(C) of the tax code, a high-deductible health plan may provide "preventive care" benefits without a deductible). If the IRS determines that EAPs fall outside the sale harbor, it should list them as a permitted coverage exception that does not cause an individual to be ineligible for an HSA.

EAPA's arguments were supported in a letter to the IRS signed by more than 40 other organizations, including the National Association of Social Workers, the American Psychological Association, and the National Council on Alcoholism and Drug Dependence. The letter stressed the differences between health plans and EAPs and noted that the U.S. government thinks so highly of EAPs, it requires they be offered to federal employees.

The IRS expects to release guidelines on HSA eligibility soon. EAPA will keep its members apprised of developments as they occur.