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Employee Assistance Program (EAP): Everything You Need to Know

Priyanka Prakash, JD

Senior Staff Writer at Fundera
Priyanka Prakash is a senior staff writer at Fundera, specializing in small business finance, credit, law, and insurance. She has a law degree from the University of Washington and a bachelor's degree from U.C. Berkeley in communications and political science. Priyanka's work has been featured in Inc., Fast Company, CNBC, and other top publications. Prior to joining Fundera, Priyanka was managing editor at a small business resource site and in-house counsel at a Y Combinator tech startup.
Email: priyanka@fundera.com.
Editorial Note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone.

An employee assistance program (EAP) is a fringe benefit administered by a business’s human resources department that helps ensure an healthy and happy workforce. When your employees are in a good place personally, that’s reflected in the quality of their work. Conversely, when employees face personal problems, productivity and performance decline. 

According to research from the Center for Prevention and Health Services, workplace costs of mental illness and substance abuse disorders range from $79 to $105 billion each year, yet more than half of employees don’t tell their employer about such problems for fear of losing their job. Furthermore, as a small business owner, you have an obligation to help your employees care for themselves, and that extends outside of the office.

An employee assistance program provides a safe, confidential forum for employees to seek help for familial, substance abuse, emotional, financial, or other personal problems. Offering an EAP as a fringe benefit can help increase your competitiveness as an employer, and it’s not costly or complicated to set up. Learn how EAPs work, how much they cost, and how to set one up for your staff.

What Is an Employee Assistance Program?

An EAP is a workplace service that provides confidential counseling and intervention services to employees for a range of personal and work-related issues. This is an employee benefit separate from health insurance—meaning it comes at no cost to the employee.

Typically, when an employee leverages their EAP, they will be connected with a network of professional health services that are part of the network the employer contracts with. Services are administered by licensed counselors who provide confidential services at no cost up to the plan limits.

While EAPs can offer a broad range of services, most deal directly or indirectly with mental health issues.

Why You Should Provide an Employee Assistance Program

From an employer’s perspective, the main benefit of providing an employee assistance program is to prevent personal issues from leaking into the workplace and affecting employee performance. For example, a worker with substance abuse problems might face symptoms of anxiety, sleeplessness, or physical ailments that directly affect their work performance.

An EAP lets you address such issues before they become too serious. And indirectly, that helps you retain more employees and establish a competitive advantage. When you account for the expenses of recruiting and training, replacing a current employee often costs as much as twice the employee’s annual salary. In contrast, good EAPs are available for as little as $10 per employee per month, so this should fit into even the smallest business’s budget.

eap

How an Employee Assistance Program Works

An EAP allows employees to get short-term counseling for personal and work-related issues by contacting a counselor in the program’s network. The services extend to employees, plus anyone else in the household.

EAP services are free up to a certain number of sessions, even for employees who aren’t enrolled in the company’s health insurance plan. After the plan limits, which vary from program to program, employees can pay out of pocket to continue their care, either with the same counselor or with a counselor outside of the program’s network.

Getting help is quick and convenient for employees. Sharon Delay, the owner of GO-HR, an outsourced HR consulting firm that provides employee assistance programs to small businesses, says EAP services are available 24/7.

“A real person will answer the phone call from the employee,” says Delay, “and that person is trained to triage the issue and figure out the next step, whether that’s a referral or an immediate transfer to a counselor.”

Urgency is helpful for emergency situations, such as suicidal employees or domestic violence cases. In addition to phone counseling sessions, which are most common, some EAPs also offer email assistance, live chat, video counseling, and in-person counseling sessions.

Assistance obtained through an EAP is confidential. Employees can directly contact the EAP, without having to inform their employer. This reduces fear among employees that dealing with the personal problem might lead to them losing their job.

Types of Issues an EAP Helps With

An EAP helps with almost any issue on the personal or professional front that can affect an employee’s performance or productivity. Issues range from the very serious and urgent, such as suicide prevention, to simpler concerns, like struggling with work-life balance (more on these later).

EAPs provide confidential, short-term counseling, and resources for the following types of issues:

  • Depression, anxiety, and other mental health problems
  • Familial or marital problems
  • Domestic violence problems
  • Suicide prevention and crisis management
  • Substance abuse problems
  • Improving interpersonal communication
  • Improving work-life balance
  • Financial and legal problems

Michelle Hyle (name changed to protect anonymity) accessed her employee’s EAP to help her family through a separation:

“I have used my employer’s EAP several times. The first time I used the EAP was for my son, who at the time was suffering from the results of his parents separating. I liked the process because it offered five free counseling sessions, the process was confidential, and they had great follow-up. Although I did not continue with the particular counselor due to his rates, I felt the program provided some breakthrough for my son in dealing with his anger. If I had not had the EAP, I think my work would have been affected because I would be searching for a solution for them during working hours.”

A survey from the Family Work Institute shows that employees accessed EAPs most often for workplace stress and relationship issues:

eap employee assistance program

Some EAP providers go beyond the basic coverage noted above. For instance, some EAPs help employers create wellness programs, schedule group training sessions, and provide employees with referrals for child care and dependent care. The scope of the program depends on the size of your company and your budget.

Cost of Providing an EAP

The cost of an EAP usually comes down to a per-employee monthly fee. The fee ranges between $10 and $50 per employee each month. The smaller your company and the more services you want to provide, the costlier the program will be. And legal and financial services are often an add-on that comes with an upcharge.

Delay says that really small businesses sometimes find it difficult to get EAPs because providers might have minimums on the number of enrolled employees. Delay’s company GO-HR provides EAPs for much smaller businesses, with an annual flat fee of $150 for up to seven employees for five sessions. The price goes up from there for larger companies.

We’ve seen EAPs advertised with a cost as low as $1 per employee, but be careful because in many cases, what you pay for is what you get. A good EAP should give employees access to a wide network of licensed counselors, convenient ways to get help, and several free sessions before they have to pay out of pocket.

How to Set up an EAP for Your Employees

Setting up an employee assistance program starts with finding an appropriate provider. Large firms sometimes staff counselors and medical professionals in-house, but small businesses contract with external EAP firms. There are 373 EAP providers in the U.S., according to market research firm IBISWorld. With so many providers to choose from, it can be difficult to narrow down your choices.

The easiest option is to contact your current small business health insurance provider or business life insurance provider. Often, these insurers bundle an EAP along with their primary slate of services. But this isn’t always the best option. Embedded EAPs, as these are called, often just provide employees with lists of counselors or treatment providers that employees then have to research on their own. They typically don’t provide direct access to professionals who can help your employees.

Going through the following steps will help you set up an EAP for your small business:

1. Decide What Services Your Employees Need Most

The first step in choosing an EAP program is to figure out what services you want to provide. This depends on your budget, but also on the demographics of your employees. For example, depression and anxiety are most prevalent among millennials. If several of your employees are parents, then you might want to choose an EAP that’s strong on family and marital support. And an older workforce might benefit from financial counseling as they approach retirement age.

You should also look through payroll and scheduling data and find out when absenteeism and loss of productivity most affect your company and what’s causing them. For instance, are people taking time off because they don’t have proper child care for their kids? Do people feel stressed out or overworked? This will help you pinpoint which services to provide.

2. Research Employee Assistance Programs

Once you narrow down the types of services you want to provide, talk to other small business owners, ideally in the same industry and with a similar workforce, about which EAP providers they use. If you use a professional employer organization (PEO) or staffing agency for HR purposes, they might offer recommendations as well.

Here are some things to think through when evaluating an EAP provider:

  • Types of issues covered by the EAP
  • Cost to the employer
  • Number of free sessions before employees have to pay out of pocket
  • Credentials of the health professionals and counselors in the EAP’s network
  • Service channels for employees (e.g. phone sessions only, on-site visits, etc.)
  • The EAP’s wait times when an employee contacts them and turnaround time when responding to employee requests
  • Whether the EAP provides group seminars, wellness classes, or other value-added services

When evaluating each of these features, you’ll again want to think about your employee demographics. For instance, younger employees prefer multiple service channels, especially video-based counseling and live chat. Here are some additional questions to ask when choosing an EAP. You should also check out customer reviews and testimonials for each vendor.

3. Educate Your Employees About the Program

Once you choose an EAP, the last step is to notify your employees. The main problem with EAPs is the divide between availability and usage.

A 2012 survey from the Families and Work Institute shows that 74% of employers provide an EAP. That percentage declined as business size declined, but even among small businesses (50 to 99 employees), 66% said they provide an EAP. However, according to a 2016 report from Chestnut Global Partners, only 6.9% of employees made use of EAP services.

This issue is particularly pronounced at small businesses because the business owner will typically get a report from the EAP with information about how many employees are using the EAP, as well as demographic data. This leads employees to fear that the business owner will be able to deduce them from the information provided.  

 eap employee assistance program

Employers can encourage usage by educating employees about the availability of the program and emphasizing that it’s free and confidential. You can also have your EAP provider come in and explain the services as part of a mandatory company-wide training. You can also hand out flyers around the office with the name of the EAP, their contact information, and details on the kinds of services the EAP provides.

Top EAP Programs

If you need help finding an EAP program for your business, the Society of Human Resources Management (SHRM) and the International Employee Assistance Professionals Association (EAPA) put out lists of the best EAP providers. Some of their recommendations include:

CuraLinc Healthcare

CuraLinc provides EAP services to over 1,400 employers, associations, unions, health plans, and universities. CuraLinc’s areas of specialization include workplace trauma, mindfulness at work, corporate training, and management consultation. Businesses can also provide their employees with a telephonic health coach, health coaching software, and even arrange for a health coach to come onsite to provide wellness training. Pricing is quote-based. See the CuraLinc website for more information.

Cascade Centers Inc.

Founded in 1975, Cascade Centers Inc. provides EAP programs as well as a variety of other services, including work/life balance programs, onsite health screenings, behavioral health risk assessments, organizational training and development, student assistance programs, a military helpline, and executive coaching. What’s more, Cascade Center provides employers with a branded portal their employees can access to receive services. Check their website for pricing information.

BHS

BHS is a 100% women-owned provider of EAP services that currently works with over one million employees around the world. BHS has a network of 75,000 providers that can provide an array of EAP solutions, including employee and student assistance programs, work-life services, crisis management, corporate wellness, well-being coaching, and organizational development. There is also 24/7 support and an online resource library. Every business that contracts with BHS receives a performance consultation and supervisor orientations and education. You’ll also get a dedicated account manager and regular reports on the performance of your EAP. For more information, visit the BHS website.

How Small Business Owners Are Using EAPs

To help you understand how an employee assistance program can help your business, we also spoke with small business owners about how they are using EAPs to promote the well-being of their staff. Here’s what they had to say:

“We have about 38 employees at BestNotes and I felt it was imperative to include EAP benefits to them. Since we are in the mental health field, I think it was only fair to “practice what we preach” and have counseling available for all our employees. We used BPA and the effects have been great; we have already had a high employee retention, but I have noticed our employees are much happier if they are getting the help they need. It has also helped with our core values of being transparent because counseling helps people be forthcoming with their feelings and we welcome that here.” — Nicole Harvey, owner, BestNotes
We don’t offer a traditional employee assistance program, but we do have something to help our employees out when they’re struggling. First, everyone has the right to work remotely whenever they want to, and especially if they’re struggling with their health, physical or mental. If they have issues with something (or someone) in their lives, they can always talk to their team leads and get help, whether it’s regarding work or something else. If it’s something that we cannot help them with, we have a therapist who takes in all of our employees when they have issues in their personal lives. This approach has been really helpful for our employees—I’ve heard multiple times that they don’t want to leave and work elsewhere because of the support they get.” — Dmytro Okunyev, founder Chanty

An EAP Can Be a Valuable Part of an Employee Benefits Package

An employee assistance program can be an important part of a comprehensive employee benefits package. EAPs help employees deal with difficult personal and work-related issues before they impact productivity or performance. That can help businesses retain employees and maintain a competitive advantage.

Setting up an EAP requires some research, but you should be able to find a good one by asking fellow business owners and researching customer reviews. And fortunately, most EAPs are affordable for small businesses. The challenge really lies in educating your workforce about the EAP and encouraging employees to use it. Don’t delay in offering what could be a (quite literally) life-saving benefit for your employees.

Priyanka Prakash, JD

Senior Staff Writer at Fundera
Priyanka Prakash is a senior staff writer at Fundera, specializing in small business finance, credit, law, and insurance. She has a law degree from the University of Washington and a bachelor's degree from U.C. Berkeley in communications and political science. Priyanka's work has been featured in Inc., Fast Company, CNBC, and other top publications. Prior to joining Fundera, Priyanka was managing editor at a small business resource site and in-house counsel at a Y Combinator tech startup.
Email: priyanka@fundera.com.

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