EAPs Boost Their Post-Recession Profile

November 11, 2010

Leaders at Caterpillar Inc. regularly track the use of their employee assistance program, or EAP, including the number and type of calls they receive.

But those statistics, albeit somewhat helpful, don’t address more workplace relevant questions, says John Pompe, who manages the disability and behavioral health programs at the Peoria, Illinois-based equipment manufacturer. “What we don’t really know is if, after using EAP, does your productivity go up? Are you at work more? Are you using less in health care dollars?”

Caterpillar, which has been piloting an outcomes analysis tool developed by Chestnut Global Partners, joins other companies that are re-evaluating and reframing their EAPs as they transition out of the recession.

For Caterpillar leaders, that means taking a closer look at the EAP’s effectiveness, similarly to how they scrutinize other components of the company’s benefits package. Other employers have expanded the number of sessions they offer, in part to counteract some of the costs associated with the Mental Health Parity and Addiction Equity Act of 2008, according to industry experts. Another trend: elevating the role of EAP to help improve employee wellness.

“The economy, wellness on steroids and mental health parity—all of those forces are just causing them (EAPs) to be more front and center for employers,” says Michael Thompson, a principal in the health and welfare practice at PricewaterhouseCoopers.

Nearly half—47 percent—of employers reported a slight to significant increase in EAP usage, according to findings from a joint Towers Watson & Co. and National Business Group on Health survey released in late 2009. But reliable national data on use of the programs is scarce, in part because of the proprietary nature of the data, as well as the large variance in how the programs are structured, industry experts say. Thus, anecdotal feedback regarding the recession’s impact on EAPs can vary significantly.

Mandie Conforti, a Chicago-based senior consultant at Towers Watson, reports that, at some companies, EAP use has increased to 5 percent compared with 3 percent two years ago. And there’s no sign that the upward trend has leveled off, she says.

But Pompe has a different take, describing EAP use at Caterpillar as flat to slightly down in 2009. When I asked around, that seemed to be a trend,” he says, speculating that people were instead focusing on work and holding onto their jobs. “No one wants to acknowledge that they are struggling. People I just think really hunkered down.”

Caterpillar’s EAP use for 2010 is projected to run 13 percent higher than in 2009 and 8 percent higher than in 2008, based on annualized data through September, Pompe says. Now the manufacturing company is using the Chestnut outcomes tool to gain a better sense of how those upfront EAP investments pay off at the worksite.

Repositioning EAP
To maximize their EAP investment, some employers have taken steps to better promote their programs, along with boosting the number of annual sessions covered from the once typical three to as many as six, and sometimes even more at some companies, Conforti says. One key driver has been the mental health parity act. Federal officials issued related regulations earlier this year; they went into effect for plan years beginning on or after July 1, 2010.

“There is a significant savings for having people utilize their EAP first,” Conforti says. Plus, corporate leaders also hope that a more comprehensive EAP program will get help to people faster before their mental health, financial or other stresses worsen, she says.

To reach more employees, some companies also are requesting more on-site sessions, says Ken LeBeau, director of Philadelphia-based insurer Cigna Corp.’s EAPs. Session topics may range from general stress management to more targeted subjects, such as suicide prevention in the wake of an employee tragedy, he says.

In late 2009, Ernst & Young began to host an ongoing series of telephone-based sessions that mixed psychology and financial planning, after hearing anecdotal reports of employees making early 401(k) withdrawals, among other signs of financial strain, says Sandra Turner, director of the company’s EY Assist program, which encompasses employee assistance and related work/life programs. “We realized that we needed to be more proactive in reaching out to our people.”

The sessions, which incorporate the psychology of spending and saving, also provide an opportunity to remind employees about EAP, as well as the personal financial counseling service that Ernst & Young offers its workforce, she says.

Amid today’s heightened focus on employee wellness, corporate EAPs also can yield some insights into employee strains and needs, PricewaterhouseCoopers’ Thompson says. “It’s unfortunate, but the EAP tends to be an underutilized resource within a company.”

After all, employee stress—whatever the initial source—can potentially trigger a cascade of workplace problems, from productivity to employee turnover to substance abuse, Thompson says. By collecting more information from those who call in, and tracking broad patterns, a national company could identify a surge in calls from a particular office and tailor programs in response, he says.

Improving Data
Chestnut Global Partners developed its outcomes analysis tool, in part to respond to heightened employer interest in results data, a refrain that only became more urgent as the economy worsened, says Dave Sharar, a managing director at Chestnut, which provides employee assistance services to more than 200 U.S. employers. “There has been more push to say, ‘How do we know this works? This just can’t be a nice thing to have. Can you demonstrate to me that this has an impact?’ ”

The tool, which Caterpillar started using in January, is designed to walk employee assistance users through a series of questions, as many as 25, depending upon what outcomes data the employer wants to collect.

EAP users are first surveyed when they call, or come in for help, followed by a later survey, ideally three months later. Depending upon what types of questions employers use, information can be collected regarding absenteeism, presenteeism, workplace stress and other work-related outcomes.

Sharar acknowledges that there is a business case for Chestnut to offer the analytic tool to its clients, beginning with large employers like Caterpillar. Down the road, Chestnut might be able to justify a rate increase if data show that workplace results improve. But he also wants to publish findings, in the hope of spawning more outcomes-related collaboration in the field. To date, more than 400 EAP providers have requested the outcome tool, which is available for free online.

For Caterpillar, it’s still early days and only a small sample of data, involving 51 EAP users, has been analyzed. But that data, based on surveys conducted during the first four months of 2010, found that absenteeism improved by 21 percent. During the same stretch, presenteeism also showed progress, with a 34 percent improvement.

It’s not a scientific case study, but it’s more sophisticated than Caterpillar has conducted regarding EAP results to date, Pompe says. “As a business leader, it’s impressive to me because it actually shows some improvement that can be loosely attached to a EAP.”

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