Today’s employees are seeking a healthy work/life balance and they’re lobbying companies to make changes in the workplace that will help create that equilibrium. In response, employers are prioritizing their workers' well-being by supplementing their employee benefits package with additional support resources, such as those offered through an employee assistance program (EAP).
This holistic focus on employee health and wellness comes at a critical time. The COVID-19 pandemic fanned the flames of an already growing mental health crisis in America—compounding the need for workers to have access to mental health care.
According to The Hartford’s 2021 Future of Benefits Study, 27% of U.S. workers say they struggle with depression or anxiety most days or a few times a week, and this affects their work productivity in the following ways:
- Trouble focusing/concentrating: 61%
- Feeling irritable/angry: 46%
- Missed time (late to work, leave early, missed days, unexpected absences): 29%
- Unable to collaborate: 19%
- Missed deadlines/meetings/quotas: 18%
"When your employees' mental health is strained, it can result in reduced productivity, poor work quality, low morale, higher employee turnover, and an increased risk of employee injury and disease," said Olivia Curtis, Wellness Specialist for G&A Partners. "There is a real need to help employees manage stress in the workplace and at home, and to provide access to resources that help them manage personal issues impacting their lives."
If you are a small or mid-sized business owner searching for ways to boost your employee recruitment and retention efforts, supplementing your traditional benefits package with an EAP is a great place to start. Doing so will demonstrate a commitment to your employees' physical, mental, and financial well-being, and can help you remain competitive in a fluctuating labor market—another significant factor affecting businesses these days.
What is an Employee Assistance Program (EAP)?
An employee assistance program (EAP) provides employees with confidential access to outside counselors, resources, and referrals—helping them to address personal and work-related issues that may be affecting their job performance or mental health and well-being. Employers typically include EAPs in benefits packages at no cost to employees, and services are also available to employees' immediate family members and others living in their home.
In the past, EAPs primarily focused on finding treatment for workers or family members struggling with alcohol or substance abuse issues. These programs have expanded significantly in recent years to now offer a broad spectrum of services, including those that:
- Improve health, wellness, and mental well-being
- Increase workforce productivity
- Reduce absenteeism and health claims
- Provide crisis management
- Help with conflict resolution, stress management, and work/life balance
"EAPs are valuable resources that can help employees cope with issues affecting their ability to reach their potential," according to the Society for Human Resource Management (SHRM). "EAPs can help employers reduce absenteeism, workers' compensation claims, health care costs, accidents, and grievances. In addition, they can address safety and security issues, improve employee productivity and engagement, and reduce costs related to employee turnover."
The Broad Scope of Employee Assistance Program Services
Fundamentally, an employee assistance program (EAP) provides employees and their family members with confidential access and referrals to trusted mental health providers and local community service providers, including hospitals, specialty treatment programs, social services, and other assistance organizations. An EAP can also be designed to provide an array of supplemental benefits that help employees lead healthier lives.
EAP services can include, but are not limited to:
- Relationship/family issues
- Mental health support
- Divorce care
- Grief counseling
- Stress management
- Healthy lifestyle education
- Budgeting, debt management, and retirement planning
- Financial services
- Career issues, development, or transition assistance
- Child care and elder care
- Family services
- Counseling services and referrals
- Substance abuse support
- Work-issue support
Because not all EAP programs provide the same services, it’s a good idea to explore partnering with a provider (external EAP model)—or implementing an in-house solution (internal EAP model)—that offers solutions in sync with your employees’ needs.
EAP Service Costs
Though employees generally have free access to EAP services, there is a cost for employers to administer the program in-house or through an external vendor. These costs vary according to program offerings and employer size but generally average $35-$50 per employee per year. Payment is typically based on a per-user, per-call, or per-employee basis.
What is the difference between an EAP and an employee wellness program?
While both programs support and encourage employee wellness, EAPs focus on helping people navigate life challenges through access to outside counselors, resources, and referral services. A wellness program concentrates on improving employees’ physical health by encouraging annual health assessments, promoting health and wellness activities, and providing educational resources. A wellness program can supplement an EAP—and vice versa—but they are not the same.
How Can an EAP Benefit Your Employees and Your Business?
An EAP reaches beyond the workplace to help employees address personal issues that may be impacting their work performance and, possibly, your overall company culture. For this reason alone, an EAP can be as beneficial to your business as it is to your employees.
In the Business Case for EAPs, the U.S. Office of Personnel Management (OPM), which serves as the chief human resources agency and personnel policy manager for the federal government, states that EAPs can reap benefits for employees, families, and communities by:
- Improving productivity and employee engagement
- Developing employee and manager competencies in managing workplace stress
- Reducing workplace absenteeism and unplanned absences
- Supporting employees and managers during workforce restructuring, reduction-in-forces, or other changes
- Reducing workplace accidents and the likelihood of workplace violence or other safety risks
- Supporting disaster and emergency preparedness
- Facilitating safe, timely, and effective return-to-work for employees' short-term and extended absences
- Reducing healthcare costs associated with stress, depression, and other mental health issues
- Reducing employee turnover and related replacement costs
Study Results: The Impact of EAPs on the Workplace
Morneau Shepell and the Employee Assistance Professionals Association (EAPA) conducted a study of 35,693 employees between 2010 and 2019 to determine how EAP services impacted work presenteeism, work absenteeism, workplace distress, work engagement, and overall life satisfaction.
The study evaluated how employees rated on these five measures—before, and after receiving counseling services through an EAP. The results, which showed marked improvements in all areas, included:
- 56% of employees reported that their issue was making it difficult to concentrate on work.
- After counseling, only 28% reported difficulty concentrating.
- 29% missed a half-day or more of work time.
- After counseling, only 13% reported continued absenteeism.
- 22% reported feelings of dread when going to work.
- That rate dropped to 13% after counseling.
- 32% reported not being engaged in their work.
- After counseling, the rate was reduced to 23%.
Overall Life Satisfaction
- 37% reported dissatisfaction with life overall.
- Only 16% report dissatisfaction with life after receiving counseling.
"The results of the 2020 Workplace Outcome Suite confirm that short-term counseling offered through EAPs work very well for employees and employers alike," said Barb Veder, Morneau Shepell's vice president, global clinical services, research lead, and chief clinician. "At a time when employees need convenient and effective support for work and life issues, employers looking for a cost-effective way to both provide this benefit while countering presenteeism and absenteeism should strongly consider an EAP."
Cost Savings: The ROI of an EAP
Morneau Shepell and EAPA's 2020 Workplace Outcome Suite also estimated an EAP's return on investment (ROI) for small, medium, and large U.S. companies. The results were:
- 3:1 ($3 for every $1 spent on an EAP) for small employers
- 5:1 for medium employers
- 9:1 for large employers
The results also found cost savings ranging from about $2,000 to $3,500 per employee from reductions in work presenteeism (87% of total return) and absenteeism (13%), according to the study report. A break-even 1:1 ROI was possible even at a very low utilization level of just one EAP counseling case per every 100 covered employees.
How an EAP Can Help You Attract and Retain Top Talent
There is a growing demand for jobs with robust benefits packages that include quality bedrock benefits, such as healthcare, dental and vision insurance, and an employer-sponsored retirement plan—as well as programs that support employees’ emotional well-being.
Many business owners acknowledge their employees’ shifting needs and understand that adding mental health benefits is important, but for small and mid-sized businesses, budgetary constraints may be a concern.
Consider this: Boosting your benefits package with an EAP can broaden your appeal in a tight labor market and even help you compete on a more level playing field with larger competitors that may be offering more substantial salaries and bonuses. It can also fortify your employee retention rate.
“Think about your benefits plan as an extension of your company’s overall strategic plan and mission and consider what your plan says about your company to potential recruits,” says Brett Brown, Director of Benefits Administration for G&A Partners. “Yes, candidates care about salaries and bonuses, but they also want to work for an organization that shows compassion and caring for employees. An EAP demonstrates commitment to your employee’s well-being and that you will be there for them during life’s challenging times.”
If you find that a change in your employee benefits is in order, consider consulting with an expert third-party administrator, like a professional employer organization (PEO), that can tailor an employee benefits package for your company and help you realize cost savings. When you partner with a PEO, you gain access to high-quality, affordable benefits that help you compete for top talent and provide your employees with the resources they need to protect and care for themselves and their families. A PEO can also help you onboard EAP services and communicate information about the program’s benefits to employees.
How to Select and Set Up an EAP that Suits Your Business
If you are thinking about adding an EAP to your employee benefits package, it's essential to research your options so you choose a program that best suits your business—and employees' needs. There are many different types of EAP models to choose from, as well as program offerings.
Types of EAPs
- Management-sponsored or in-house programs: The EAP staff is employed by the organization and works onsite with employees.
- Fee-for-service contracts: A business contracts directly with an EAP provider but only pays for actual services used by employees.
- Fixed-fee contracts: An employer contracts directly with an EAP provider and pays a set fee based on the number of people employed by the business regardless of their actual EAP use. This is one of the most common delivery models.
- Consortia: A group of typically smaller employers who join to contract with an EAP service provider, which helps to reduce the cost per employee. This model tends to be fixed fee and offers a variety of services.
- Peer-based program: Peers and coworkers provide education and training, assistance to troubled employees, and referrals. This model requires a robust employee education and training program.
- Mixed-model program: Employers and unions with multiple worksites often use this type of EAP because they have large groups of employees with different needs.
"Although some larger organizations provide EAP services in-house using their own internal teams of counselors and staff members, most employers outsource EAP services to experienced providers that can handle the compliance and reporting issues, in addition to providing comprehensive counseling and referral services," state SHRM's "Managing Employee Assistance Programs." "EAPs are the most outsourced HR function, with 62% of employers saying they outsource their EAPs."
Factors to Consider when Selecting an EAP
SHRM recommends considering the following factors during your EAP selection process:
- Years of Service, References, and Current Clients: Do other employers with similar workforces recommend the vendor?
- Service Locations: Are EAP services available onsite, offsite, or both?
- Ability to Provide Services to Employees in Different Locations: Can the provider handle clients who are not all in the same geographic area?
- Hours of Service: Are services available to employees who work night shifts or unusual hours?
- Scope of Services: Does the vendor offer a full range of services, such as stress management, elder care help, substance abuse programs, wellness programs, and financial counseling? Are their services sensitive to language and culture, particularly during emergencies, critical incidents, and when training is needed?
- Service Delivery: Do they offer a variety of service delivery methods, including virtual, in-person, and by telephone?
- Referrals: Can the vendor refer employees to outside resources when they need more or different help than the EAP provides?
- Follow-up Services: Is there a process for tracking clients' progress and ensuring they continue to get the help they need?
- Credentials and Training: Can the EAP provider demonstrate that its professional employees are trained and hold appropriate and updated credentials?
With all things considered, your EAP should reflect your employees' needs, so be sure to evaluate each provider's scope of services carefully. For example, if you have several employees with young children, consider providers that offer childcare services; or if you have mostly older workers, look for providers that offer counseling related to retirement planning. Survey your employees to get valuable input about their EAP preferences and consider forming a diverse selection committee to discuss and evaluate options and, eventually, help select your EAP provider.
EAP Policy and Compliance
Once you have selected your EAP provider (or have decided to pursue an in-house delivery method), it's time to tackle the details that help protect your employees and company in the long run. Creating a company EAP policy—and identifying compliance measures you must adhere to—are your company's first line of offense and defense.
The EAPA recommends that organizations create and adopt a written policy that defines your EAP's relationship to your organization, how it will function and be used consistently throughout the organization, its scope and limitation of services, and how your organization will protect employees' privacy.
It is also essential to ensure that your company remains compliant with federal, state, and local regulations that pertain to EAPs.
Federal rules of note include:
- Mental Health Parity and Addiction Equity Act of 2008: This law ensures that mental health and substance use treatment coverage, including depression and addiction, is treated fundamentally the same as other physical ailments. It mandates that an EAP not be used as a gatekeeper—in which members are required to use the EAP before accessing mental health or substance abuse benefits—unless a similar program is needed for medical and surgical benefits.
- Employee Retirement Income Security Act (ERISA): EAPs that are staffed by trained counselors and provide counseling sessions for mental health or substance abuse are subject to ERISA, which requires plans to provide participants with information about the plan's features and funding, fiduciary responsibilities, grievance and appeals process and more.
- Consolidated Omnibus Budget Reconciliation Act (COBRA): If the EAP provides healthcare, such as substance abuse or mental health counseling, it must provide COBRA continuation coverage to employees and dependents (qualified beneficiaries) that lose healthcare coverage under the EAP due to a qualifying event. As a technical matter, COBRA must be offered only for the portion of the EAP that provides health benefits; an employer need not offer extended coverage for legal services or financial counseling. If the EAP does not provide services directly but only provides referrals and helps employees obtain those services, it is not considered a group health plan and is not subject to COBRA regulations.
- The Health Insurance Portability and Accountability Act (HIPAA): This privacy rule establishes national standards to protect an individual's medical records and other personal health information. Substance abuse treatment programs subject to HIPAA must comply with the privacy rule, provide appropriate safeguards to protect the privacy of personal health information, and set limits and conditions on the uses and disclosures that may be made of such information without patient authorization.
Communicating EAP Services and Benefits to Employees
An EAP is most effective when services are used by employees and family members who need them. Therefore, companies should implement a robust employee information program across multiple platforms that communicates your EAP’s services, benefits, privacy measures, and—perhaps most importantly—how to use the services.
Traditionally, employees have underutilized EAP services for several reasons, including lack of knowledge about the program and services and privacy concerns. However, there are indications that EAP usage has increased since 2020.
For example, The Hartford’s 2021 Future of Benefits study found that 70% of employers surveyed have seen an increase in the utilization of their employee assistance programs, primarily due to the mental health crisis brought on during the COVID-19 pandemic.
“Often, employees are unaware of the resources available to help them with work or personal life issues,” says Michelle Mikesell, G&A Partners Chief People Officer. “Awareness, education, and communication will help them to better understand and utilize your EAP services. By encouraging employees to take advantage of these benefits, you are demonstrating your support and understanding of mental health challenges—and life events—that everyone faces at one point or another.”
Following are helpful tips shared by industry experts for employers seeking to increase their EAP usage:
- Communicate how an EAP can help. Employees are often unaware of the services and resources available to them through their EAP. Take every opportunity to explain how EAP services can help them deal with work or personal life issues, like during employee orientations, open benefits enrollment periods, employee information sessions (in-person and virtual), and through electronic communications and your company website.
- Provide detailed information about how to use EAP services. Let employees know how to initiate EAP services, and that they can be delivered via phone, video-based counseling, online chatting, email interactions, or face-to-face. In addition, let them know if your EAP offers a set of counseling sessions free of charge or provides access to app-based mental health tools.
- Highlight the privacy aspect of EAP services. Employees are more apt to use EAP services if they know their information will be kept confidential. Concerns about anonymity are one of the top reasons employees do not use EAP services. Emphasize that confidentiality is one of the most critical components of your EAP and that their privacy is protected by law.
- Provide employee training on EAP resources. Develop EAP program guidelines and train employees and managers about your EAP services and how to access them. Communicate policy requirements, as well as changes and clarifications when needed.
How G&A Can Help
If you are seeking innovative ways to attract and retain top talent, and help your employees achieve a better work/life balance, consider adding an employee assistance program (EAP) to your benefits package. G&A offers access to an EAP, administered by Unum, that provides an extensive range of services, including: 24/7 access to care counselors and a virtual library of free resources and online self-help tools. Our team can help you set up your EAP, facilitate your relationship with UNUM, and communicate information about the program’s benefits to your employees.