What Is an Employee Assistance Program?

Learn how EAP programs can help your employees.

female counselor speaking with two people
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In a perfect world, employees' personal lives would never affect them at work. But the reality is that many workers spend time on the job worrying over untold personal matters that can reduce their effectiveness and curb their productivity. This has led to the development of Employee Assistance Programs (EAPs), which provide support and resources for struggling employees and may be right for your business.

Basics of Employee Assistance Programs

An EAP is a unique employee benefit that works as an intervention program. It serves to identify and help employees resolve problems they may be facing in many different areas of life:

  • Professional
  • Financial
  • Legal
  • Emotional
  • Marital or family issues
  • Substance abuse issues
  • Other personal issues

These are problems that interfere with employees' ability to perform their work at company standards. In some cases, the problem is serious enough to put the employee and the company at risk. EAP programs can help employees resolve these problems through evaluations, referrals to other professionals, and counseling. This way, employees can get back on track both personally and professionally.

EAPs are strictly voluntary—that is, the employee under duress can choose to forgo participation. However, if they choose to participate, the entire process is handled confidentially to protect the employee against any retaliation from other parties. This allows employees to get the help needed to overcome a problematic situation but also prevent third parties involved in the situation from retaliating against them or other employees at the firm. In this sense, the EAP program protects the interests of both the employee and the company.

EAPs are generally third-party services as opposed to in-house services of the company where the employees work. These unique benefit programs come with expertise and resources beyond what a typical employer can offer, which takes the burden off the employer and reduces the personal risks posed if a manager or a co-worker were to attempt to mediate the situation themselves.

How Employee Assistance Programs Can Be Used

While no problem is too small for an employee to seek help from an EAP, these programs are particularly useful for employees who are under a great deal of emotional stress because of professional, marital, or familial discord. They may be coping with a serious health issue with a parent, have an out-of-control child at home, be facing overwhelming student loan debt, or just need to talk with a caring counselor about a personal problem.

For example, an employee might be experiencing domestic violence at home. Over a period of time, she might arrive to work late and stay long hours, but could still be less productive and more distracted. An observant manager at an organization with an EAP can refer this employee to the human resources department to receive information about the EAP and seek counseling or other support. Because of the confidential nature of EAPs, the employee can get the help needed to escape the situation but can also prevent the spouse from showing up at the workplace unannounced and causing harm to her or someone else at work.

In many cases, the spouse or partner of the employee can also obtain support from the EAP in sorting things out so that the employee can experience a more positive work and personal life. Some EAPs also include access to free and low-cost legal aid and referrals to attorneys who work with people in the community.

EAP Health Services

It’s important to note that EAPs are not actual health insurance plans, nor do they provide financial support to employees. They generally cannot diagnose a health issue or replace traditional medical or psychological evaluation and treatment.

However, many EAP programs offer nurse advice via toll-free hotlines for making important health decisions or for getting information about mental health counseling or health services. Some programs may also be able to facilitate access to specialized care, such as for elder care services, respite care support (which provides assistance for caretakers), and even free medical clinics.

An Employee Assistance Program should be used to supplement—not replace—a comprehensive employer-sponsored health insurance plan.

Cost of Employee Assistance Programs

An EAP is generally offered at no cost to employees up to certain plan limits, making it a win for your workers. But it's not free for employers. Over the last decade, employers have annually paid around $12 to $40 per employee.

However, the costs have stayed stable in comparison to costs in other areas of employer health care spending. In addition, the employer costs may be partially offset by gains in productivity and the potential employer health care savings for more serious medical treatments that could be needed if persistent problems or negative behaviors are not caught early.

How Employee Assistance Programs Are Administered

EAPs are generally paid for in full by employers and are most often operated through an agreement with a third-party administrator. This is critical because employees must feel comfortable speaking in confidence with a professional about their personal problems without fear of losing their jobs or status at work. However, EAPs are not portable benefits—they expire upon termination from the company benefits program.

The benefits provided by EAPs are generally treated as excepted benefits (not subject to COBRA and ACA guidelines) if they provide referrals as opposed to direct medically related support. However, if the EAP offers direct medically related support, such as mental health counseling or treatment for alcoholism/substance abuse, they are subject to COBRA and ACA guidelines. According to the U.S. Department of Labor and ACA guidelines, EAP benefits are only regarded excepted benefits if they do not offer "significant benefits in the nature of medical care or treatment."

Your company could be subject to ACA employer penalties for not providing adequate care if the EAP offers direct medically related support as opposed to referrals to other professionals.

EAP plan administrators at a company should encourage employees to take advantage of the no-cost benefit, which is generally available at any time of the year. All employees should be advised about the EAP program and given instructions ​about how to access these benefits at no cost to them when they need support. Managers can and should refer employees to the EAP if they are unable to resolve the matter through on-the-job coaching and HR support. While the company may know that an employee has participated in the EAP, the employee’s specific situation is kept private and never disclosed to the employer.​

How to Decide Whether an EAP Is Right for Your Firm

The overall purpose of any Employee Assistance Program is to ensure that employees are able to manage their daily lives and remain productive at work, even when faced with difficult life experiences. To support that aim, it's important to evaluate the benefits, costs, and online reviews or word-of-mouth feedback for any EAP before you choose one.

As you narrow your options, keep in mind that EAP programs are only one component of a competitive benefits package. However, they can be highly beneficial in the workplace because they promote employee self-managed care, which can reduce employee stress and boost company productivity.