The Hot List 2013: The Ever-Expanding Role of the EAP
When two bombs exploded near the finish line of the Boston Marathon on April 15, dozens of police and medical personnel rushed to the scene. In the weeks and months that have followed since the blasts—which left three dead and hundreds wounded—nurses, doctors and surgeons have also played a critical role in the victims’ recovery.
Behind the scenes, however, another group has quietly contributed to the effort: employee assistance programs.
“We are on complete overload,” says Gary Cohen, co-president of Employee Resource Systems Inc., a Chicago-based EAP provider, the week of the bombing. “People call up because they just need someone to talk to.”
Since surfacing during the 1940s to address alcoholism and substance abuse among white-collar workers, EAP providers have emerged as an all-encompassing services supplier for employers. Paired and offered with other employee benefits like heath care, providers now tackle everything from more traditional employee issues such as substance abuse and psychological ailments to financial duress, wellness, education and overall employee stress.
“We deal with any conceivable problem,” Cohen says.
About 74 percent of employers surveyed in a 2012 study by the Families and Work Institute, a nonprofit research firm, reported using an EAP. That’s a major jump from the 2005 survey, when just 46 percent of employers reported that they provide the benefit. Perhaps unsurprisingly, large employers are more likely to offer an EAP benefit, according to the Families and Work Institute study.
During the week of the Boston attack—a week in which an explosion at a fertilizer plant in the small town of West, Texas, also claimed at least 15 lives and destroyed entire neighborhoods—providers found themselves especially busy, tending to client companies as employees affected by the events sought counsel.
The value proposition for an EAP extends far beyond headline-grabbing events.
Jim Walter, president and CEO of ESI Employee Assistance Group in Wellsville, New York, says roughly 20 percent of any employee population is likely dealing with some sort of significant personal issue. As a result, these workers are more prone to absenteeism or even “presenteeism,” when employees go to work but are too distracted to do their jobs.
The financial blow to organizations can be substantial. Walter estimates companies lose roughly three weeks’ worth of productivity per employee, per year because of such personal distractions.
Moreover, as the cost of health care for employers continues to rise, EAP providers view themselves as a proactive service to reduce employee stress and other potential issues that could lead to health costs down the road, says Stella Antonakis, a senior consultant at Mercer, a human resources consultancy.
Antonakis, who has been in the industry since 1987 and started as a licensed clinician, says an EAP is “one of the more affordable” benefit costs for employers. What’s more, the service is free to employees, and the return on investment can be significant, she says. The cost for employers varies depending on company size, level of customization and model design. But Antonakis says the range is between $1 per employee per month for a three-session model to more than $3 for six or more sessions per employee per month.
According to data cited by Mercer from the U.S. Department of Health and Human Services, employers save between $5 and $16 for each dollar invested in an EAP because of reduced absences, turnover and medical claims. “There are huge implications for employers as far as health care costs,” Antonakis says.
The trouble is getting employees to participate in the program.
“What I see, unfortunately, is that utilization is not at a healthy level,” Antonakis says.
Because providers tend to use different formulas to report EAP usage, there is no standardization in the industry. Still, Antonakis says EAP usage for clinical services has hovered around 3 percent for some time. She says more communication and marketing is needed—as well as more education and awareness on mental health issues in the workplace—for employers to get the maximum value from the benefit.
The issues leading to employee absence and turnover have changed through the years. And oftentimes, the changes reflect the broader forces at work in the economy.
For instance, Antonakis says that substance abuse, while still a problem for many, has dropped down the list of reasons why workers use EAPs. Climbing the ranks the past five years have been issues related to personal finance, marriage and family, and overall stress connected to the 2008 financial crisis and ensuing recession, says Rich Chaifetz, chairman and CEO of Chicago-based provider ComPsych Corp.
Alcohol and chemical dependency accounted for just 4.2 percent of overall calls fielded by ComPsych in 2012, according to the company’s internal research. Psychological issues—depression or other undefined mood disorders—and partner/relationship problems accounted for 41.7 percent and 19.9 percent of fielded calls, respectively.
Chaifetz cited the ongoing home foreclosure crisis as an issue the firm is constantly helping clients with, as well as issues surrounding work-life balance, such as child care.
The market for EAP providers is also experiencing a transformation, Chaifetz says, as consolidation has rippled through the U.S. market and globalization has increased the need for provider services abroad.
Most attractive to employers with a global presence is to have a single provider servicing all locations, says Rich Paul, senior vice president of customer and product strategy with ValueOptions, a behavioral health and wellness firm in Norfolk, Virginia.
But most U.S.-based EAP providers have yet to fully expand globally, Paul says, instead choosing to enter into partnerships with providers or individual practitioners in other countries.
Meanwhile, providers are positioning themselves with a broader arsenal of services, hoping to gain an edge in an increasingly competitive market. For Chaifetz, the next major area of focus is employee health and wellness. “I believe in order for people to perform well, they need to be distraction-free and they have to be performing at an optimal level,” he says.