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Joint EAP Work-Life Programs Cut Costs

April 1, 2004
Related Topics: Featured Article, Compensation, Benefits

A growing number of employers are moving toward integrated work/life and employee assistance programs, spurred by cost savings, ease of use for employees and higher utilization rates.

    Employers, consultants and vendors say these combined programs offer a "one-stop" option that permit companies to effectively help their employees with complex personal problems while cutting costs and eliminating administrative duplication.

    More employers are turning to these joint programs, say many observers. "The trend is definitely towards integration," says Mary Ann Gornick, senior adviser on work/life issues for Raleigh, N.C.-based Workplace Options Inc. "We're seeing more and more companies who are looking at blending the two services."

Flashes of the obvious
Deerfield, Ill.-based Baxter International Inc. plans to launch its combined program in April, says Alice Campbell, director of work/life benefits. "It's clearer and cleaner in terms of communicating" the program to employees and costs less, she says. Campbell estimates the move to one vendor for both EAP and work/life referral programs will cut costs by a third.

    "You can offer more services for the same or less money," says Sandra Turner, Cleveland-based director of Ernst & Young's EY/Assist integrated program. The firm introduced its program in 1995, after its new vice chairman for human resources asked, "`Why do we have two different services? Why can't these two be done together?' and we says, ' That's a good question. We'll get back to you.' It was one of those blinding flashes of the obvious."

    Furthermore, "there's a logical and natural continuum that these services suggest," says John Dillon Riley, San Ramon, Calif.-based manager of employee assistance, work/life and health and productivity services for ChevronTexaco Corp., which integrated its EAP and work/life programs in 1998.

    The move to integrated programs is "consistent with a trend towards consolidation and reducing the number of vendors that a company has to work with, which is increasingly common," says Joan Pearson, a principal with Towers Perrin in Seattle. There is usually a reduction in cost by having one vendor in place of two, she says.

Joint reporting and invoicing
    Integrated programs are easier to administer, say observers. Employers "now have one account executive, one IT platform to deal with, one set of integrated reports, one invoice" as well as one communication plan, says Jean Holbrook, Boston-based director of product management for Ceridian Corp., which provides these programs.

    Separate programs can also be cumbersome, says Alan Youngblood, Warren, N.J.-based assistant vice-president with Aon Human Capital Services. If there is an earthquake in California, to which Web site do you refer employees? he asks.

    Observers say integrated programs can resolve such a dilemma as to which program to call. "I think employees appreciate its simplicity," says Pearson. "It is not unusual for people to have an issue that the EAP as well as the work/life company can address."

    For instance, parents who have just learned their child is autistic commonly try "to get some help understanding the condition, some help knowing what child care resources are available. It may be helpful for the family to get some therapy in terms of how to most effectively deal with an autistic child. It may be necessary to refer someone to a community support group for parents," says Pearson.

Single point of entry
"Some of those resources come from an EAP, and some come from a work/life program, so having one call to make, or one Web site to visit, I think, increases the chances that people get all the resources they need," she says. "The more serious the problem, the more likely it is, in my opinion, that both EAP and work/life have a contribution to make."

    Furthermore, "there's really some value to that single point of entry" because people "don't always present the real issue," says Holbrook. In one case, she says, a mother called to say she needed afterschool care the following week for her child. When she made the same request again just a few weeks later, she was questioned.

    As it turned out, "her child was setting fires in the afterschool program, and another whole kind of clinical support" was needed. Without an integrated program, where the right questions were asked, "she would never probably have been able to say, `I'm worried about my child's emotional well-being,"' Holbrook says.

    With EAP and work/life programs' integration, "you also have a destigmatization of the traditional mental health components that were tied more specifically to an EAP," says Richard A. Chaifetz, chairman and CEO of Chicago-based ComPsych Corp.

    Observers note the integration between EAP and work/life programs follows a wave of consolidation that occurred several years ago when it became increasingly common to merge EAP and managed behavioral health care services.

    In fact, there are signs of yet another impending wave of consolidation, with health and fitness programs being added to the EAP and work/life elements as well. Chevron's Riley says his company is now in the process of rolling out such a combined program.

    Meanwhile, the decision as to whether the EAP program is rolled into the work/life program or vice versa depends on the situation, say observers. "It really depends on what has been in place within a particular company," says Aon's Youngblood.

Gatekeeper program
However, Jon Van Cleve, a work/life consultant with Lincolnshire, Ill.-based Hewitt Associates Inc., says work/life programs are more frequently becoming the gatekeeper for the integrated program. Many employees are more comfortable approaching the work/life program and may believe there is some stigma attached to contacting an EAP if, for instance, they only need child care, he says.

    Communicating the combined program when it is newly introduced can be difficult, say observers. Managing these programs' promotion so that employees really understand the breadth of the services is a "real challenge," says Gornick.

    Youngblood says, "It primarily boils down to how you market it, because if you've got separate and distinct identities for the program, then to say, `Just call one 800 number for both"' typically doesn't encourage people to reach out. This most often requires "some type of rebranding" and replacing both the EAP and work/life program names with something new, he says.

    Chevron is a little unusual in that it has different phone numbers for its EAP and work/life segments, though they are considered integrated as part of a continuum of services, says Riley. The approach has worked well for Chevron, he says. Referrals are occasionally made between the programs, though "most of the time people have it right as to whom to call," he says. The EAP is staffed by Chevron employees, while a vendor handles the work/life segment.

    Measuring return on investment once an integrated program is introduced can be difficult, observers generally agree. A number of factors can be measured, says Chaifetz, including absenteeism, turnover, productivity, errors committed and workers comp claims.

    Many employers also now attack this issue by asking employees how much time they have saved by using the program. While this self-reporting is not entirely reliable, it may be the best approach, say observers.

    By its very nature, measuring these programs' effectiveness is less clear cut than it would be for some other aspects of a company's operations.

    ROI may be a secondary issue to employers, however.

    "I don't know anyone who's tracked that really well," says Jennifer Duris, Chicago-based U.S. work/life manager for PricewaterhouseCoopers, which introduced its integrated program six years ago. But, she added, "We don't use it to make business decisions."

    PricewaterhouseCoopers' leadership "has already bought into the fact that you can't run a business these days without a work/life resource and referral service and EAP. It's a necessary part of doing business," she says.

    Bill Scott, vice-president human resources at York, Pa.-based Susquehanna Pfaltzgraff Co., a diversified media and consumer product manufacturing company, noted the company experienced several disturbing incidents days after it introduced its ComPsych integrated program in 2002.

    They included the death of an employee at one of the company's radio stations in front of his co-workers. "It's not exactly what you think you're going to see at work," he says. But ComPsych did its job well in counseling employees, says Scott.

    While Susquehanna Pfaltzgraff has some ROI data supporting the use of the program, the company's decision to use it "also just comes from a philosophical belief" as to what services it should offer its employees. "It's hard to put a price tag on this," says Scott.

SOURCE: March 29, 2004 issue of Business Insurance. Written by Judy Greenwald.

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