Best Practices in HR
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  February 20, 2018

What is an EAP (Employee Assistance Program) & How Does It Work?

An Employee Assistance Program (EAP) is a confidential workplace service that employers pay for. An EAP helps employees deal with work-life stressors, family issues, financial concerns, relationship problems, and even drug or legal concerns. It is often available to both employees and their families to help workers remain productive at work.

An EAP helps employers because it makes for happier employees. Employees have a confidential place to go with their personal problems. It also helps employees deal with stressors — from drug abuse to legal problems — so they don’t carry over into the workplace.

How Employee Assistance Programs (EAPs) Work

An EAP provides outside counselors, resources, and referrals to assist employees and their family members. Any employee assistance benefits received by employees or family members remain confidential. So while the employer pays for the service, they have no insight into an employee’s specific use of the service.

Normally, what happens when you offer an EAP is that an employee under stress can call a phone number to get immediate help from a professional counselor on topics like:

  • Workplace personality conflicts – advice and suggestions on how to work with a difficult manager or co-workers.
  • Drug addiction – advice on how to deal with the employee’s addiction, or how to deal with a family member’s addiction, including teen drug use prevention.
  • Mental health issues – depression, anxiety, anger management or other needs an employee or their family members may be dealing with.
  • Health and caregiving issues – how best to manage return to work issues after a worker’s comp claim, or how to manage a disability or medical issue at work, or how to obtain help for an ill or elderly loved one.
  • Legal and family advice – marriage counseling, divorce, or child custody issues.
  • Financial counseling – how to avoid bankruptcy, or how to pay down credit card debt, or create a budget.
  • Grief assistance – Support for employees who have lost a loved one as well as for employees experiencing the loss of a co-worker, or a significant event such as a shooting at work.

Most EAPs provide a set number of counselling referral sessions, from 1-3, at no cost to the employee to fully assess the issue before recommending a resource, therapist, or service to the employee. The EAP does not do long-term counseling, but can help the employee get the ball rolling.

77% of Employers Offer an EAP to Their Employees

CompEAP reports that Employee Assistance Program (EAP) Services were provided by 93% of large employers and 74% of all employers in 2012 (up from 46% in 2005). A 2016 SHRM report showed the number to be 77%, in other words, more employers are offering EAPs over time.

Likely due to cost, smaller businesses with 25 or fewer employer are less likely to offer an EAP. It’s also possible that smaller employers, without an HR department, are not aware of EAP services as a benefit offering, or don’t know how to set one up.

Types of Benefits Provided by An EAP

Most EAP programs provide a similar set of benefits that range from counseling referral services to other resources across a broad range of topics. Typically, anything that could cause an employee distress on the work or home front can be handled with a quick confidential phone call to the EAP. This includes things like:

  • Mental health issues
  • Marriage and family issues
  • Health management issues
  • Interpersonal communication issues
  • Financial and legal issues
  • Substance abuse issue

Left untreated in the workplace, issues like anxiety, family problems or drug abuse translate into poor performance, missed work, bad customer service and workplace injuries that may cost you in terms of disability and workers compensation. An EAP is designed to give employees the help they need to resolve all kinds of issues, so they can remain on-the-job and productive.

Based on a 2016 report by Medium, the image below shows the kinds of concerns employees are most likely to seek help for.


Source: Medium

Cost to Offer an EAP to Your Employees

Offering an EAP should cost you about $35 a year per employee. However prices vary greatly depending on your location, and whether it’s a pay-per-use program or you pay a fixed rate per employee. Thus, the range can be anywhere from $10-$100 a year per employee. Typically, larger employers pay a lower per employee rate than smaller companies as you can see in this chart below, based on EAP rates in Washington DC.

EAP Average Cost by Employer Size

Size of EmployerAverage EAP Cost
(Per employee per year)
1-25 Employees$50
25-100 Employees$36.70
101-250 Employees$32.70

Data source: www.you-can-learn-basic-employee-rights.com

In addition, an article by Fully Effective Employers, suggests that some EAP services are free – but you get what you pay for. For example, free EAP counseling might be offered by your local college’s counseling education master’s or doctorate program, but you’ll likely get grad-students as counselors. They may not have a lot of experience dealing with more serious issues like drug addiction.

How to Find an EAP

Shortlister, a benefits consulting firm, provides a list of the top 20 EAP providers in the US. SHRM’s vendor directory lists 43 EAP providers. International EAP Association, EAPA, which is a trade organization for EAP providers can also connect you to a local EAP provider if you call them at 703-387-1000. Another option is to search the internet for an ‘employee assistance program’ in your city.

However, the best way for a small business to offer an EAP, may not be purchasing directly from an EAP provider, but instead working with an HR/benefits/payroll software or service company that provides an EAP as part of a larger benefits program. That way your employer contribution to an EAP can be deducted from your business taxes correctly. We recommend Justworks.

Visit Justworks

Why Provide an EAP

EASNA, which is the trade organization for EAPs, suggests that for every dollar employers spend on an EAP, the ROI is $3, making an EAP a sound investment for all size businesses.

Some employers wait to provide an EAP until a major event, such as a workplace death, a business buy out, or even a weather disaster such as a flood or tornado — to help employees cope.

Other employers are more proactive and realize that personal issues can seep into and negatively impact someone’s productivity at work. In fact, EASNA reports that 1 in 4 adults have an untreated mental disorder, while 1 in 8 may have an addiction problem.

Offering an EAP proactively can prevent these issues from affecting employee productivity and reduce turnover, which costs businesses thousands of dollars every year.

Employee FAQs After You Offer an EAP

Offering an EAP isn’t going to do much good for you or your employees, unless you explain how it works. You’ll need to provide training to educate them on what an EAP program is, how it works and how they can access services.

The biggest fear employees might have is a concern that somehow you will know what they talk to the counselor about, or that they will get fired if you somehow find out they have a mental health or addiction problem.

Employees will have many questions once you launch your EAP. It may take several reassurances to convince them to trust the EAP program. Here are common questions they may have and sample responses.

  • Is it confidential? (Yes. No employee specific information is shared with employer.)
  • Do I have to pay? (No, EAP counseling and referrals are free services to the employee.)
  • How do I know it’s confidential? (Counselors are required to maintain confidentiality.)
  • Will they report issues to you, like drug addiction? (Yes, in aggregate only. No names.)
  • If my manager recommends I use the EAP, do I have to use it? (No, but since managers don’t have a counseling background, they might encourage you to seek the help of an expert.)
  • How do I contact the EAP? (Provide the EAP contact phone number or website.)

A best practice is to create a flyer or handout with the name of the EAP, the contact phone number, and information on what kinds of services the EAP provides. Then offer a short training session to educate them on the EAP. Make sure employees know that EAP counselors maintain strict confidentiality, and they only report basic information back to the employer such as number and types of referrals/contacts. No specific employee information is shared.

The smallest employers may have trouble convincing employees that an EAP is confidential. That’s because the employer will typically get a report from the EAP showing demographic data such as the number of employees seeking services, what kinds of services they seek (financial, legal, mental health), what state they’re in, and the job level of employees seeking services (staff, manager, executive).

At a large employer this data isn’t a problem, but employees in a smaller company may fear that you will be able to deduce from the EAP reports, who is seeking services — especially if they’re the only person in a given ‘state’ with a ‘manager-level’ job.

Bottom Line

An EAP is a super program that pays for itself by keeping employee drama and an employees’ personal and interpersonal issues under control. That benefits your workplace, saves you time, and may save you money in reduced worker’s comp and turnover. It’s a benefit many employees appreciate, but may never think to ask for. However, if you offer an EAP, make sure you take the time to explain it’s confidentiality to your employees, so they’re not afraid to use it.

Consider using Justworks to offer your employees an EAP program as part of an HR / benefits package.

Visit Justworks