What Is an Employee Assistance Program & How and Why to Create One
An employee assistance program (EAP) offers employees support for personal and workplace problems that can affect their output at work and enjoyment of their personal life. Most EAPs help employees with substance abuse and mental health issues but can also cover family issues, wellness concerns, and retirement planning.
As you explore the possibility of an EAP for your small business, you’ll want to consider how it will be managed (in-house or via a third party—or a combination of both), as well as legal implications and the benefits EAPs offer to your employees and your business.
How EAPs Work (+ Sample EAP Policy)
An EAP provides outside counselors, resources, and referrals to assist employees and their family members. Any EAP benefits received by employees or family members remain confidential. Employers do not get to know who is utilizing the service, what the reasons are for, or how often employees call. Due to the Health Insurance Portability and Accountability Act (HIPAA) regulations, which we address later, there is complete confidentiality between the third-party EAP provider and the employee.
Although their offerings are broad, most EAP services either directly or indirectly address mental health, financial concerns, family issues, overall well-being, and legal matters. Specifically, services may include:
- Substance abuse treatment
- Tuition reimbursement
- Legal assistance
- Childcare services
- Eldercare services
- Health and wellness stipend
- Grief counseling
- Financial assistance and debt relief
- Healthy eating memberships
- Professional development
- Career transitions
- Travel credits and reimbursement
- Conflict resolution
- Retirement planning
All EAPs provide a predetermined number of counseling referral sessions, typically one to three, at no cost to the employee to fully assess the issue before recommending a resource, therapist, or service to the employee. Most EAPs do not offer long-term counseling but can help direct the employee toward services that are designed to be long-term solutions.
Here is a sample EAP policy for your employee handbook:
Creating an EAP
While workplace stress and mental health concerns are indeed big issues affecting small businesses and their employees, it’s not the only reason to create an EAP. Taking a holistic approach, you can help your workers’ well-being throughout their life.
When creating your EAP, you can keep the entire program in-house, outsource all of it, or anything in between. Depending on the setup you use, the costs will vary.
Legal Considerations
When your small business offers an EAP to your team, you may include mental health services, access to therapists, and other support which would require confidentiality. Be aware of some legal issues, especially if you’re offering all or part of your EAP in-house.
Mandatory Referral
In most cases, employees can choose whether they participate in your EAP. If an employee is going through marital problems and your EAP includes counseling services, they can choose to use that service entirely on their own.
However, if an employee has a substance abuse problem, you may require them to use services under your EAP. It’s best to get the employee’s consent for a mandatory referral but you may require the counseling service even without their consent, if you have strong documentation in their personnel file of a problem.
Continuing with the substance abuse example, if your employee signs a consent form, then the counselor could speak with you after treating the employee to provide limited feedback about the employee’s fitness for work. Without a release, however, it’s much more difficult to allow an employee to continue working unless the counselor provides you with a fitness certificate or other form stating the employee’s issues are resolved or properly under control. The counselor will not be able to provide you with any more information.
Tip: Even for an employee who has a substance abuse problem, we don’t recommend requiring the use of EAP services as a condition of continued employment. The employee could claim disability discrimination based on a mental disability, invasion of privacy, or misuse of confidential medical information.
Confidentiality & HIPAA
Gym memberships are one thing, but many EAPs today involve medical information. When an employee uses a mental health counselor provided under your EAP, even though the counselor may be paid by your company, you have no right to access the employee’s medical record. The only time a mental health counselor could release limited information is if the employee signs a consent and release form.
There are two exceptions:
- An employer may receive a limited report showing what services were provided, the cost of those services, and the type of issues addressed.
- If an employee is using EAP services because of a mandatory referral, the provider can inform the employer about whether the employee is attending required sessions, participating in required services, or fit to return to or continue working.
HIPAA establishes privacy rules and standards to protect the privacy of medical records and personal health information. It applies to health plans and providers. So, if you have an in-house medical professional, even if your company pays for 100% of their service, they are not allowed to disclose any patient information to you, absent a waiver and consent.
Benefits of EAPs
According to the American Institute of Stress, 94% of workers feel stress at work; 63% of workers report feeling so stressed at work, they’re ready to quit. This is a significant amount of the workforce that is stressed to the point that their work productivity will fall, costing your small business money.
It’s better to attack this problem head-on, and that’s one of the biggest reasons employers create employee assistance programs. Building an EAP for your small business can help reduce the stress your employees face and benefit your entire company by increasing productivity and efficiency. Employees will also feel supported by you and be more loyal to your organization.
Bottom Line
An employee assistance program can be a cost-effective way for you to add value to your employees’ experience. Added to your benefits program, an EAP can put your company over the top and give you a competitive edge to attract and retain top talent. Giving your employees access to resources and support to help manage their entire lives will make them happier and more productive employees.