Traditionally purchased direct from providers, many group insurance contracts now offer ‘embedded’ Employee Assistance Programmes (EAPs) and helplines. With so many versions available, it is important to compare the service offered should an organisation wish to remove the direct-pay service in favour of an ‘embedded’ one.  They do not always offer the same level of service.

What is an Employee Assistance Programme?

An EAP can be a strategic and cost-effective workplace programme, able to assist productivity and attendance issues within the workplace. It supports employees, helping them to identify and resolve personal concerns that may affect job performance e.g. health, marital relations, family, financial, alcohol, drugs, legal, emotional, stress, or other personal issues.

EAPs act as a gateway to a wide range of services and support functions. The use of an EAP service by an employee is voluntary and the vast majority of employees who use EAP services do so through self-referrals. Alongside these self-referrals an EAP must be able to accept referrals from other organisational parties too, including union representatives, HR professionals and line managers. The Employee Assistance Professionals Association (EAPA) is the trade and clinical audit body and provides a good benchmark for the acceptable quality of the service provision.

The services offered by an EAP can involve a blend of short-term solutions and focused support, such as counselling, money and debt management advice, child and eldercare information and legal guidance.  Additionally there is employee assistance for emotional and workplace issues and management guidance on handling workplace situations.

Over the years EAPs have become an integral tool in an organisation’s attempts to engage employees and support the health and wellbeing of its workforce. Traditionally counselling services only, they now offer much fuller work/life support for employees.

It is important to remember that employees do not have to be experiencing problems to use the service, as there are many positive benefits of regular engagement for lifestyle guidance.

Are they taxable – specifically a P11d (benefit in kind)?

The Income Tax (Benefits in Kind) Regulations 2000 generally offers an exemption for welfare counselling, allowing it to be excluded from P11d considerations (subject to certain conditions). (1)

Under the Income Tax (Earnings and Pensions) Act 2003 “an exemption conferred by such regulations is conditional on the benefit being made available to the employer’s employees generally on similar terms”, suggesting that it is important for all, not just insured employees, to have access.(2)

The HMRC guidance on allowing access by the employer for non-employees, e.g. expanding EAP support to family members and dependants, is also set out.  It states that the exemption does not extend beyond the employee concerned. However, in recognition of the fact that employees may sometimes be affected by family and relationship difficulties, limited services ( eg couple or family counselling) can be provided to an employee’s dependents by the employer’s EAP, yet still remain within the welfare counselling exemption.(3)

As well as limiting the dependant’s support that can be provided without affecting the P11d exemption, legal advice is restricted and must be co-related to any emotional issues supported by the EAP. The HRMC acknowledge it may be difficult to distinguish how and at what point the advice from the EAP changes into wider advice on legal issues and advise that common sense should be applied where “the fundamental problem is covered by the terms of the exemption”(3).

HMRC has agreed with the EAPA that legal information provided within the context of welfare counselling for employees will not prevent the P11d exemption from applying, as long as it remains within the agreed guidelines, but legal support cannot be extended to family or dependants.

Having used the legal service myself, for a boundary dispute, the first question raised was, “Is this conflict causing you any personal distress?” and I confirmed that it certainly was!

How should EAPs be promoted?

As long as all employees, not just those insured, are covered there are some fantastic and dynamic ways employers can ensure value from an insurer EAP. The key is having an effective communications programme. Throughout the year there are specific opportunities to promote the use of EAP – National Walk to Work Week or Healthy Heart Week are great times to promote physical health.  How about remembering debt advice in January, when the bills start to hit?  Materials for promotion can cover a range of traditional media, such as posters and wallet cards, flyers, case studies (to illustrate the value) and  employer guides on specific health topics.   Webcasts and interactive guides can enhance communications and on-site support at employee fairs really helps the promotion of the services.

Clearly insurers that want their services to be used have embraced the idea of supporting the employee provision through such communications programmes. When an employer is choosing whether or not to use an insurer version of the EAP, this has to be considered.  If not fully promoted, the EAP will not serve its purpose as an effective employee benefit.

 Are all EAPs the same?

At a base level all will have telephone counselling and ideally will offer a set number of face to face counselling sessions. All should offer more sessions on a pay basis for the cases that warrant them. More advanced EAPs may offer initial Cognitive Behavioural Therapy (CBT) assessments, if the traditional face-to-face session suggest this approach would be beneficial. Additional benefits such as online resources and health risk assessments (HRA) are becoming widespread and can assist the organisation’s health and wellbeing strategies.

Critical incident support should be available for events that significantly impact the workplace e.g. a robbery or unexpected death.  This is usually on a “paid for” basis but, as with other aspects of EAP, this can support the employer’s duty of care.

The most advanced offerings have online and telephone legal support for employers, offering compliant documentation, legislative updates, advice on tax and health and safety issues – as well as case-by-case support for individual situations. This legal aspect may help employers reduce legal costs from retained or out-sourced legal services, so could benefit organisations of all sizes.

What should employers consider?

Savings on direct-pay versions of EAPs can be made, but only alongside a professional evaluation of the alternatives offered by insurers. Should an insurer be chosen, it is  important to remember that terms and conditions can change at each review period.  Regularly checking for more competitive offers and even removing the EAP, if it is no longer financially viable, has to be carried out.

Bearing in mind that many insured products (group risk, medical or liability) may have these services embedded, advisers need to evaluate each proposition to ensure the right EAP is put in place. As well ensuring all employees are covered (at nil or minimal cost), the depth and breadth of the communications programme should be assessed for both the quality and quantity of materials available. Additional services such as critical incident, HRA, legal and CBT accessibility may all be factors in decision making.

The provision and quality of management reports for both EAP and other services also needs to be assessed. The insurer’s willingness to share their insurance and third party services management information (MI) can aid an organisation’s strategic targeting of health issues.  The most rounded insurers offer preventative guides and specialist support – either from in-house specialists or their third party suppliers.

The adage ‘prevention is better than cure’ reflects the importance of the EAP to group insurance.  Canada Life’s Group Income Protection claims experience for 2012 showed that almost 30% of claims were for mental health reasons.  Any support offering that may reduce these incidences should be explored and full and effective use of an EAP can help to create a happy, healthy and productive workplace.

Paul Avis, Marketing Director of Canada Life Group Insurance