Benefits Business

Mental health treatments become standard benefit

Employee assistance programs (EAPs) help deter lost productivity

By Len Strazewski

You can feel the tension building and the anxiety mounting. Lots of closed door meetings and too-long coffee breaks. The scent of alcohol on someone’s breath—even before lunch.

Feeling that times are getting a little unbearable, employees may take a “mental health day” here and there. But sometimes the feelings get worse and turn into serious depression, substance abuse or behavioral disorders.

When employers and their employees struggle with the fallout from an economic downturn, there’s not much an agent or broker can do directly. If the stock market is tanking and the credit market is squeezing tight, employers start looking for ways to cut their costs and their headcounts. And their employees start to lose their mental and emotional balance.

If the problems are serious, the employee benefits program should respond with coverage and funding for mental health and substance abuse treatments up to the limits of other surgical and non-surgical treatment coverage—thanks to the new Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008.

The law was enacted in October as part of the economic bailout package, the Emergency Economic Stabilization Act of 2008, and made permanent the Mental Health Parity Act of 1996 that mandated that all health plans provide the same annual or lifetime dollar maximum for mental health benefits as other medical benefits.

But the new law also expands parity mandates to include equal limits for substance abuse disorders and other plan enhancements beginning in 2010.

According to a recent analysis by Hewitt Associates, a human resources and employee benefits consulting company in Lincolnshire, Illinois, the law also:

• Mandates that the financial coverage for mental health and substance abuse disorder benefits cannot be more restrictive than the predominant financial requirements for substantially all medical and surgical benefits under the plan. Financial requirements include deductibles, cost-sharing, out-of-pocket limits and annual or lifetime dollar limits.

• Requires that treatment limitations for mental health benefits cannot be more restrictive than the predominant treatment limitations applied for substantially all medical or surgical inpatient and outpatient benefits under the plan, including the number of covered office visits, days of inpatient coverage and similar limitations of duration and scope.

• Requires group health plans to provide out-of-network benefits for mental health and substance abuse disorders consistent with the out-of-network benefits provided for other medical and surgical benefits.

The new law exempts small employers with 50 or fewer employees and provides for application of a cost exemption if the group health plan can prove that compliance will result in a cost increase of 2% or more in the first year and 1% in subsequent years.

What about less serious mental health and behavioral disorders? If an employer’s employee benefits plan includes an employee assistance program (EAP), employees should have access to in-person and toll-free telephone-based counseling sessions and referrals to behavioral counseling, financial, legal and credit counseling and substance abuse treatments. The extent of the service varies by plan design and cost, but most EAPs provide a minimum of three brief counseling sessions and referrals to other services covered by health plans.

Though EAPs have been available since the 1980s, formed as a response to concerns about drug and alcohol abuse, the programs have expanded to cover a broader range of issues and have become more accepted as a positive response to problems.

According to a 2008 survey of a sample of 1,100 employers with 50 or more employees by the Families and Work Institute in New York, about 65% of respondents provide EAPs.

If your clients don’t provide EAPs for employees, now’s the time to encourage them to add the benefit—even if they are looking harder at cutting costs. In addition to helping employees deal with problems, the programs support better productivity and lower absenteeism, industry experts say.

Earlier this year, the nation’s largest EAP provider, Chicago-based ComPsych Corporation, reported that about one-third of employees of their member employers said they need to take a “mental health day” when personal issues stress them out or family or relationship issues demand their time.

According to the survey of more than 1,000 employees, legal and financial issues and general lack of energy also lead to productivity-sapping absenteeism.

Another EAP provider survey, conducted by Bensinger, Dupont & Associates (BDA) in Chicago, confirms the impact on productivity. More than 35% of individuals seeking assistance from the firm say their personal problems have had a negative impact on job performance and 83% say their work performance improved since contacting the EAP.

“The purpose of an EAP is to drive productivity,” says Marie Apke, chief operating officer of BDA. “EAPs help employees address a variety of work and family issues—issues that when left untreated hurt job performance.”

Employees are also more sensitive to their own personal issues, she notes, and more comfortable seeking EAP assistance. “The stigma of seeking counseling seems to have disappeared over time. Employers are doing a better job of communicating EAP benefits, and employees seem more aware of their benefits and more willing to seek referrals.

“They know how many sessions the EAP provides and want to make use of them to help resolve their problems,” she says.

Can employers document a real return on investment from EAP services?

“Many of the EAP providers are now attempting to document a real return on investment and have published some impressive reductions in absenteeism,” says William Cole, partner at the Prairie Benefits Network LLC, an employee benefits broker and consultant in Evanston, Illinois. “But most employers are willing to take their value on faith.”

Prairie Benefits specializes in small to medium employers with 500 or fewer employees and designs group employee benefit plans that include wellness and health management as well as insured benefits.

“We recommend stand-alone EAP benefits to all our clients,” Cole says. “And once they have adopted an EAP program, they very rarely cancel the benefits, even if they are looking at their program with an eye toward cutting costs. The services are relatively inexpensive and provide a valuable resource to not only employees directly but also human resources managers who need a way to assist employees in crisis.

“When an employee comes to an administrator with emotional or behavioral issues, or even legal or financial concerns, the EAP is a quick and practical response that gives the employee access to real expertise.”

Cole says that EAPs have become more popular with employers as wellness and health management services have become standard components of employee benefit plans. “EAPs are now a piece of the whole wellness platform for employers. Even if the numbers don’t communicate a clear return on investment, most employers believe that the value is intuitive.”

And in tough economic times, most employers will be able to see the results. *

The author
Len Strazewski has been covering employee benefits issues for more than 20 years and is employee benefits editor of Human Resource Executive magazine. He has an M.A. in Industrial Relations from Loyola University.