Buyer’s guide to employee assistance programmes 2012

Focus on facts

What is an employee assistance programme (EAP)?

An EAP is a worksite-focused programme designed to provide confidential information, support and counselling to employees with personal and work-related problems.

Support is available 24 hours a day, seven days a week, by telephone, although increasingly EAP providers are also providing their services through the internet. Another important part of an EAP is access to face-to-face counselling. Full EAPs will provide up to six or eight face-to-face sessions.

Although calls are confidential, many EAPs will provide employers with management information. This can help them target wellbeing campaigns as well as enable them to identify and tackle potential workplace issues.

What are the origins of employee assistance programmes?

EAPs first made an appearance in the US in the 1950s to help employees deal with alcohol problems. As globalisation took a grip in the 1970s, the first programmes started appearing
in the UK, with the first significant take-up beginning in the 1980s.

Where can employers get more information and advice on employee assistance programmes?

The Employee Assistance Professionals Association (EAPA) is the professional body for EAPs. Its website contains details of providers and consultants as well as news and information on employee wellbeing.

Nuts and bolts

What are the costs involved?

Price depends on the type of service and the number of employees covered. For example, a telephone-only service might cost between £2 and £3 a year per employee, while a full service for an employer with 1,000 employees would cost between £7 and £10 a year per employee. An employer with 50,000 staff would pay less, between £5 and £8 for a full service.

What are the legal implications?

EAPs can be an important part of an employer’s strategy to safeguard employees’ mental health and wellbeing. Although a Court of Appeal ruling in 2002 (Sutherland v Hatton) suggested that an EAP could protect an employer from being sued for stress by an employee, the position was clarified in 2007 when judges stated that an employer had to take more steps to protect employees than simply implementing an EAP.

What are the tax issues?

EAPs are a business expense rather than a benefit in kind, providing they comply with HM Revenue and Customs’ (HMRC) exemption for welfare counselling. This means EAPs cannot include advice on: finance, other than debt; tax; leisure and recreation; and legal issues.

HMRC recognises employees can be affected by family problems and subsequently couples and family counselling is an option, but EAPs cannot be made directly available to dependants.

In practice

What is the annual spend on EAPs?

Figures on the state of the EAP market are impossible to get hold of because providers are reluctant to disclose details of their sales. The most recent attempt was in 2008, when the EAPA found £50.6 million was spent on EAPs. Take-up of EAPs has since increased but the annual spend may not have shifted hugely.

Which providers have the biggest market share?

Without any recent sales data, determining which providers have the biggest market share is difficult. Based on the size of their operations and some of their contracts, the largest include Axa Icas, PPC Worldwide and Workplace Options. Others include Ceridian, CIC, FirstAssist, PMI Health Group, Right Corecare and Validium.

Which EAP providers have increased their market share the most over the past year?

Again, it is impossible to say which providers have increased their market share.

With many staff under pressure, employee assistance programmes have an important role to play at the moment and there some good-value deals to be had, says Sam Barrett

In times of economic uncertainty, employee assistance programmes (EAPs), which provide access to information and counselling, can be a good way for employers to support their staff. Anne Payne, executive director at Validium Group, says: “There has never been a more important time for EAPs. Targets are getting tougher as teams get smaller and this is pushing stress levels up.”

The good news for employers is that EAP prices have fallen significantly. Louise Flowers, head of risk and wellbeing at Lorica Employee Benefits, says: “A few years ago, [employers] would have paid £20 to £25 per employee per year, but this has fallen to between £5 and £10.”

The price drop has been driven by a number of factors. Competition between providers has been fierce, with several swallowed up by larger firms, such as Capita’s acquisition of FirstAssist in September 2010.

Providers have also been undercutting their rivals, and ‘free’ EAPs are offered as an added-extra to products such as Aviva’s, Canada Life’s and Unum’s group income protection.

But many feel prices have bottomed out. Nick Malhomme, head of global sales and marketing at PPC Worldwide, says: “Pricing is now starting to stabilise. Some employers are now realising free EAPs do not always offer all the services, such as management reporting, that make them a valuable part of a wellbeing strategy. Employers want value for money.”

Many providers have noted this desire for a more comprehensive service. Kate Nowlan, chief executive of CIC, says the company has taken on customers that have had a free service but now want something extra. “Some employers want to fulfil their duty of care and realise this is not always possible with a free EAP. We can provide a range of services to support employee wellbeing, including training programmes, trauma management and mediation.”

Preventative stage

There is also evidence that providers are broadening the areas they cover. For example, Axa Icas is looking to extend its EAPs further into the preventative stage, says Eugene Farrell, key account director at Axa PPP Healthcare. “It is common to run an EAP alongside a smoking-cessation programme or a diet or fitness plan because it can help with behavioural change. We also encourage staff to call the EAP if they have problems with their physical health.”

But Mike Blake, compliance director at PMI Health Group, says there is still a stigma around ringing a helpline for mental health problems. “By broadening the services, employers can encourage more staff to use them,” he says.

There is also a move to integrate EAPs with other areas of healthcare. Axa Icas is exploring this with its occupational health and private medical insurance. “We are looking at how services can be more co-ordinated,” says Farrell. “If [employers] can recommend an employee calls an EAP as early as possible, say when they first call in sick, it may prevent a long-term claim on the income protection policy.”

Providers are also looking at how to engage with more employees, and many see technology as the key. EAP websites are commonplace and can give staff access to information to prevent their problems escalating. Some providers are also using technology such as web chats, social media and text messages to reach staff.

Alan King, president and managing director of Workplace Options UK, says: “With a helpline, the use is primarily by women aged between 35 and 50. When we introduced live chat through the internet, we found we were able to reach more men as well as younger people. We now have about 15% of all our service delivered by electronic means.”

Global solutions

Another key market trend is globalisation. The market used to be very UK-driven, but more employers now want global solutions so they can deliver a comparable service to all staff, says PPC’s Malhomme. “Employers can try to cobble together a solution with different providers in different markets, but this can be difficult and time-consuming. A global provider can save a lot of time and frustration.”

But whether a global or a UK product is required, all providers agree that promotion is key to the success of an EAP. Lorica’s Flowers says employers should work with their provider to increase usage of their programme. Promotional activity could include information on the intranet, wallet cards, posters and employee newsletters, as well as reminding staff about it if they are off sick.

“Take-up is low on EAPs and most employers will get only 2% to 3% of employees using it,” she says. “But promote it well and include it within a wellbeing programme and take-up can grow to 20% or more.”

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