How to Offer Employee Assistance Programs

What is an employee assistance program (EAP)?

Employee assistance programs provide employees with confidential access to outside counselors, resources, and referrals to address personal and work-related issues that may be affecting their job performance or well-being. Employers typically include EAPs in benefits packages at no cost to employees, and services are available to employees' immediate family members and others living in their home.

In the past, these programs primarily focused on finding treatment for individuals struggling with alcohol or substance abuse issues. Employee assistance programs have expanded in recent years to now offer a broad spectrum of services, including those that:

• Improve overall 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

Aside from the role these programs play in supporting managers and supervisors to address employee and company challenges, EAPs offer invaluable resources that often help organizations prevent workplace violence, trauma, and other safety and security-related incidents.

What should be included in an employee assistance program?

Fundamentally, employee assistance programs provide 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 supporting organizations.

EAPs can also be designed to provide an array of supplemental benefits that help employees lead healthier lives, such as:

• Support for relationship and familial issues
• Mental health support
• Grief counseling
• Stress management
• Healthy lifestyle education
• Budgeting, debt management, and retirement planning
• Career issues, development, or transition assistance
• Childcare and elder care
• Counseling services and referrals
• Substance abuse support

Because not all employee assistance programs provide the same services, it’s a good idea to explore EAP models that offer solutions in sync with your employees’ needs.

EAP Service Costs

Though employees generally have free access to EAP services, there is an administration cost for employers. These costs vary according to program offerings and employer size but generally average $12-$40 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. Conversely, an employee 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.

What are the benefits of offering an employee assistance program?

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 benefit your business just as much as it benefits 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

In addition to the noted benefits of employee assistance programs that extend to employers, Spill states that the return on investment for US-based employee assistance programs is $3–$10 for every $1 invested. Additionally, employees who utilize EAP benefits show increased productivity, reduced absenteeism, and improved overall wellness.

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 coverage, such as healthcare, dental and vision insurance, and an employer-sponsored retirement plan – as well as programs that support employees’ mental 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 and help you compete with larger companies that may offer more substantial compensation packages. 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 care for their employees. An EAP demonstrates commitment to your employees’ well-being and it shows 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 find cost savings. When you partner with a PEO, you gain access to high-quality, affordable benefits that help you attract and retain top talent by providing 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 benefits of employee assistance programs.

How to select and set up an EAP that suits your business

If you’re thinking about adding an EAP to your employee benefits package, it's important to research your options so you choose a program that best suits the needs of your business and your employees.

There are many different types of EAP models to choose from, as well as program offerings. So, it’s important to consider the different EAP models, select reputable providers, and ensure policies and compliance are in place before you determine how to set up an EAP.

Types of EAPs

• Management-sponsored or In-house Programs: An EAP specialist or team is employed by the organization and works onsite with employees. This allows your employees direct access to EAP professionals.
• Fee-for-service Contracts: A business contracts directly with an EAP provider but only pays for services used by employees.
• Fixed-fee Contracts: An employer contracts directly with an EAP provider and pays a fixed fee based on the number of people employed by the business – regardless of their EAP usage. This is one of the most popular EAP delivery models and frequently used by small businesses and startups.
• Consortia: A group of typically smaller employers who join together to contract with an EAP service provider – helping 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: This type of EAP model involves a combination of the above models and is ideal for employers and unions with multiple worksites that require a range of services because of large groups of employees with different needs.

According to the International Foundation of Employee Benefit Plans, 35% of surveyed corporate benefits professionals stated their organization has somewhat or significantly increased outsourcing over the past five years. Due to expertise, risk, technology, and cost reasons, approximately 40% of the benefits function is outsourced with administration of employee assistance programs being one of the most outsourced functions.

Factors to Consider when Selecting an EAP

The Society for Human Resource Management (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, 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 employees are trained and maintain appropriate, 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 reliable 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. Creating a company EAP policy, including compliance measures you must adhere to, are your company's first line of defense.

The Employee Assistance Professionals Association (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’s 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 is not to be used as a gatekeeper—in which members are required to use the EAP (e.g., mental health counseling services) 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 does not need to 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 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 protected health information (PHI). Substance abuse treatment programs subject to HIPAA must comply with the privacy rule, provide appropriate safeguards to protect the privacy of PHI, and set limits and conditions on the uses and disclosures that may be made of such information without patient authorization.

How to communicate 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 comprehensive 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, concerns about confidentiality, and stigmatization. Though the average EAP usage in the US is less than 10%, 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 resulting from 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 from industry experts for employers seeking to increase their EAP usage and reap the true benefits of employee assistance programs:

• Consistently Communicate the Benefits of an EAP. 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.
• Explain 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 chat, email interaction, 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.
• Emphasize Privacy Protections. 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. It might also be worthwhile to explain compliance regulations on data privacy, such as HIPAA, to ensure all facets of privacy concerns are addressed.
• 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.

When tailored to the needs of your employees, implemented correctly, and properly utilized, the benefits of employee assistance programs can be a game changer for the health and wellness of your employees and your organization as a whole.