Author: Sarah Sipek

You get what you pay for.” This adage rings especially true in the business world. Low salaries generally attract mediocre talent. Cheap technology is often inefficient and can require costly repairs. And free employee assistance programs can incur high health care costs for employers.

The current EAP usage rate across the industry is 6.9 percent, according to the Chestnut Global Partners’ 2016 EAP industry trends report. With so few employees using a practically free service — the typical employer allots just 1 percent of its health care budget to EAP services — it seems counterintuitive that EAPs would cost employers a lot in the long run.

The cost of providing access to an EAP has dropped in recent years, but unfortunately so has the quality of the programs being provided, according to Kent Sharkey, president and CEO of Ulliance Inc., a Troy, Michigan-based human resources consultancy.

When Sharkey started his company 26 years ago, the average per-employee-per-month fee for an EAP was $2.50. In order to stay competitive after the financial crisis of 2008, EAP providers have dropped that fee below a dollar, Sharkey said. Unfortunately, lower prices can often mean poorer services.

EAPs were originally developed to provide assessment and services for addressing a variety of personal problems and concerns that interfere with employees’ well-being and work performance. Interventions for issues such as depression and substance abuse were delivered in person, by telephone or over the Internet by licensed counselors. EAPs typically offered employees up to six of these sessions, said Dave Sharar, chief clinical officer at Chestnut.

The problem, Sharkey said, is that many of today’s free EAPs operate on an assess-and-refer model. Employees call the EAP phone number provided by their employer, but instead of receiving traditional telephonic counseling, they are referred to a long-term treatment provider outside of the EAP. This triggers a claim on the employer health care plan.

And given the rising cost of health care to both employers and employees, the last thing either party wants is to trigger more claims.

“If you’re experience-rated — meaning every year your insurance company looks at the health care costs — then your premiums will go up or down based on utilization,” Sharkey said. “If your EAP is merely directing more traffic to your health care plan, then it’s costing you and your employees a ton in the long run.”

The solution is for employers to increase their level of engagement with the EAP, according to Matt Mollenhauer, managing director at Chestnut.

“I would suggest to an employer that what they really need to do is dig deep into EAPs and ask questions,” Mollenhauer said. “They may be falling way short of what they thought they had purchased. There needs to be employer investment in the product they are buying.”

Know Why They’re Going

The first thing every employer should do in regard to managing their EAPs better is look at the usage rates, Mollenhauer said.

“The sense we’re getting from our book of business and EAP colleagues is that utilization of the EAP is on the rise compared to the past,” he said. “But that’s just the outer layer. The larger issue is that there seems to be more stress in the workplace, and the severity of cases appears to be on the increase.”

According to Chestnut’s 2016 report, stress-related issues were the top reason employees in North America accessed an EAP in 2015, accounting for 21 percent of EAP usage in that region.

While the increase in usage could be because of employers’ efforts to increase awareness of their EAP offerings, it’s the increase in severity that’s troublesome to Mollenhauer and Sharar.

“Employees are trying not to use their health care benefits because of the expense,” Mollenhauer said. “They are going to the EAP first. Stress within workplaces, either economic or work-related stress, is causing employees to a little ‘white-knuckling’ where they’re waiting too long to seek support.”

Providers such as Chestnut are seeing a response directly from employees that they need more than the standard six sessions to resolve their issues, Sharar added.

“More people are using their EAP because there’s no deductible or copay for it,” Sharar said. “Employees want to use it as much as they can.”

Free, or embedded EAPs as they are also known, are not flexible and typically don’t allow employers to make model changes midyear. Employers who are looking to be responsive to employee needs must stay on top of usage patterns and invest in standalone models that allow faster response times, Sharar said.

“Employers who are engaged with the EAP often invest in a ‘high touch’ program where they see the EAP integrated with an overall benefits strategy,” Sharar said. “When you understand how your employees use their benefits, you can ask for flexibility to meet those needs in a way that incurs the lowest possible costs.”

Get HR Involved

Even though EAPs are designed as a confidential service for employees, that doesn’t mean that a company’s human resources department shouldn’t be actively engaged with the EAP provider. Providers with HR and account management services are able to intervene before problems escalate., Sharkey said.

According to Ulliance’s book of business from 2015, performance issues ranked as the No. 3 issue among employees, behind substance abuse and anger management, respectively.

“We work with human resources to intervene with employees who have a personal problem that has developed into a performance problem,” Sharkey said. “We help employees get back on track before they seek medical help through the health insurance plan for issues including anxiety and depression.”

Developing a relationship in which HR personnel can directly refer employees to the EAP prevents a problem from festering, Mollenhauer added.

EAPs have also proven useful in dealing with a growing issue for HR managers: marijuana usage among employees. While it’s legal is some states, marijuana remains illegal on a federal level. The conflict creates problems for employers with offices in several states that currently have a zero-tolerance drug policy, Sharkey said.

“In response to employer feedback, we developed a program through which we provide random drug testing,” Sharkey said. “It gives employers an alternative to either terminating or tolerating an employee who has marijuana in their system. An employee who tests positive is formally referred to the EAP and undergoes random drug testing and counseling.”

Unlike employer-sponsored drug rehab programs, EAP-provided services require the employee to release their personal information so that the employer knows whether the employee is attending counseling and passing drug tests, Sharkey said.

In addition, the counseling occurs face to face, which has proven to be a more effective method of delivery.

Don’t Let Technology Become a Distraction

Like seemingly everything else in the workplace, technology is entering the EAP field with the promise of offering on-demand access to needed counseling services.

“The intent behind it is to create better-enhanced access for millennials and younger workers that are far more technology-driven,” Mollenhauer said.

Online counseling completed through synchronous or asynchronous emails and secure video conferences where counselor and client interact over a computer or mobile device are the first steps into implementing technology to modernize the offering, Chestnut’s Sharar said.

Sharkey thinks it’s an especially good outlet for millennials who are comfortable interacting on more of a digital platform, but he still believes in the tried-and-true method of face-to-face counseling.

“I believe it’s a great first step for people who are reaching out to the EAP, but there’s nothing like meeting face to face and developing a rapport with your EAP counselor and coach,” Sharkey said. “A lot of research and counseling suggests that the most important factor is the relationship between counselor and client.”

The American Psychological Association conducted a study in 2002 that found 31 percent of respondents reported an improved mental state after telephonic counseling compared with 54 percent with those who received face-to-face counseling.

Sharar worries that an attempt by employers to save on costs might be hurting employees in the long run.

“People with more serious issues may think that they’re getting things addressed with a telephone call or online chat when they actually have a more serious issue with a substance-abuse problem or marital issue that is not being dealt with,” Sharar said. “EAPs need to be careful of when technology is being used as a supplement vs. when it becomes a replacement.”

There is also a clear distinction between the type of technology being used. Mollenhauer is comfortable with the telephone and videoconferencing that have typically been used, but is more leery of the use of apps.

“Tracking mood and looking up marital tips on an app has a flashy appeal, but as fancy as all of those are and as engaging as they are in the short run, there is little research to suggest their long-term sustainability or that they are even clinically valid,” Mollenhauer said.

At the end of the day, there is clear value in the direct interaction provided by going in to see a counselor. Sharkey compares his counselors with coaches who observe employee behavior and are able to offer suggestions and support after developing a rapport with an employee client.

“We use a solutions-focused counseling model,” Sharkey said. “Sometimes people aren’t aware that what they are doing is harmful. We do an assessment and develop a personal action plan that includes assigning homework throughout the week. An hour of counseling doesn’t change things. It’s when you apply it in the real world and see what actually works that makes a difference. In a counseling office, it’s always easier than when you talk to your significant other about a problem. You have to be agile, and face-to-face counseling allows that.”

While high-tech apps and videoconferences over cellphones could increase usage rates, Sharar warns against using “clicks” as a measure of an EAP’s effectiveness.

“We tend to get caught up on high utilization has the most important metric,” Sharar said. “But high utilization doesn’t speak to specific results or what happened with those people who used the service. Website clicks and phone calls don’t directly lead to an outcome.”

Return on investment calculates an investment purely on financial terms, Sharar said. The EAP is so inexpensive to begin with that employers should focus on getting fewer, more effective outcomes than trying to see how many employees they can cycle through.

“I hope we’re moving back into a trend where employers very consciously engage with the EAP as a valued business partner,” Mollenhauer said. “In the times of cost-cutting, employers have gone with free and I’m hoping that trend will reverse and employers will see that there is no value proposition in those ‘free’ programs. EAPs need to evolve to the point where they’re being integrated to help solve employee performance and resiliency issues.”

Forget dogs in the office and free lunches, and put unlimited time off on permanent vacation. What the millennial workforce really needs is a way out of debt. And employers willing to help will attract the talent.

According to the Project for Student Debt, the average college student graduated with $28,950 in debt in 2014. Based on current projections by One Wisconsin Institute, a nonprofit organization that conducts research on student loan debt, it will take 21 years or so to repay this amount.

While the price of college tuition has long been a political issue, it is rapidly becoming an area of concern for employers looking to attract and hire talented, but indebted, college students.

“We’re seeing a spike in concern over student loan debts among employers,” said Amy Hollis, a national voluntary benefits practice leader at Willis Towers Watson. “Employers are noticing more and more the impact of the financial drain and emotional strain on employees who are carrying an enormous amount of student loan debt.”

While Hollis said more employers are inquiring about ways to help employees pay off their debts, few have put that advice into practice. A recent Society for Human Resource Management study found that, of 460 HR managers surveyed, only 3 percent were currently helping employees manage student loan debt payments.

The greatest roadblock is indecision, Hollis said. And it comes from too many choices. Some companies, such as PricewaterhouseCoopers, are planning to give some employees up to $1,200 a year for six years to put toward their student-loan debt. Software-maker Kronos Inc. will pay employees up to $500 a year toward student loan debts for as long as they need it.

“The practice needs a lot of vetting,” Hollis said. “There is currently a lot of energy being put into that space as an employer-sponsored voluntary benefit.”

One way employers are approaching the issue is through payroll deduction programs, said Heather Prohaska, vice president of marketing partnerships at BenefitHub. Employers can create a system where payroll automatically deducts a pretax student loan payment from their paycheck.

As with any program, employers should first evaluate their employee population before instituting such a plan, Hollis said.

“If you have a diverse population that includes many millennials or recent college graduates, voluntary benefits have proven to be a great way to meet their needs without having to spend additional money on the plan,” Hollis said.

It stands to reason that Iowa City, Iowa, is a healthy city.

The small but urban community is supported by a major university, surrounded by miles of rolling farm fields; the ideal picture of clean living in America’s heartland.

And that’s largely true. But as Joni Troester discovered when she began working at the University of Iowa, building a culture of health and wellness was anything but a given at her alma mater in Hawkeye Nation.

Currently the interim assistant vice president of benefits, health and productivity at the University of Iowa, Troester is in charge of developing and sustaining a culture of health and wellness at an institution with more than 23,000 employees. Creating a wellness program that provides measurable value for both the individual and the organization is no small task. Thankfully, Troester is well-trained.

Troester holds three degrees from the university. She began pursuing a bachelor’s degree in exercise science in 1984 and left the university in 1989 with a master’s degree in the same field. She returned in 2009 to pursue an MBA at the Henry B. Tippie College of Business. In all, those nine years spent learning in Iowa City transformed her interest in health into an ability to develop employee wellness programs that, unlike some plans being hawked these days, yield measurable results.

“I knew going in that I wanted to work supporting people’s health and well-being, especially from a corporate aspect,” Troester said. “It was initially all about working with people and trying to help them improve in terms of their own health and wellness, but as I learned more, it turned into: How do we work collaboratively to develop systems and cultures within organizations to support people?”

After completing her first master’s degree, Troester took a position at St. Luke’s Hospital in nearby Cedar Rapids. Her initial role combined health promotion — an early iteration of wellness that was new at the time — and some cardiac rehabilitation. The experience she gained there led to an opportunity to return to her alma mater in 1997 to work within the department of family medicine providing health education and health promotion to its primary-care patients.

“What I noticed when I began working there was that a lot of our primary-care patients were also employees of the university,” Troester said. “So I began to have conversations with family medicine leadership and our central human resources department about launching an initiative for employees around health and wellness.”

Those conversations eventually grew into a wellness pilot program that launched in 1999.

Troester’s partnership with HR grew closer, eventually leading to her transitioning from a health role to an HR role in 2003. In 2005 she became the director of organizational effectiveness, health and productivity.

“Initially I was responsible for wellness and then I assumed some responsibility for the preventive-type services that HR wanted to implement around workers’ compensation,” Troester said. “Gradually, as people transitioned, had the opportunity to grow the scope of the program and align it around benefits and health management services. It’s about looking at it as a strategic initiative for HR and I was fortunate to have a great team supporting these efforts on campus.”

These efforts grew into the liveWELL brand that launched in 2006. By leveraging both internal and external partnerships, Troester and her team have provided the university with a combined cost savings and cost avoidance of up to $3 million annually. Based on a Truven Health Analytics study, the program yields an annual return on investment of 2.37. This number represents the total financial gains of the wellness program divided by the total cost to deliver the program.

It’s clear her efforts have been successful. LiveWELL has been recognized for its positive influence with the Healthy Iowa Award and by being named a Fit-Friendly Worksite by the American Heart Association, and most recently a 2015 recipient of the C. Everett Koop National Health Award – Honorable Mention. Troester herself was the recipient of the 2015 Heart of HERO Award. The Health Enhancement Research Organization— a nonprofit dedicated to employee health management — assigns the award to an individual who has made an impact on multiple aspects of that person’s organization’s employee health management program as well as the surrounding community.

She says the secret to her success is being proactive.

“Oftentimes institutions spend a significant amount of time on managing chronic conditions when they really need to concentrate on the big picture of lowering risk in their at-risk population and sustaining healthy behaviors,” Troester said.

Collaboration Is Key

To exert change in an organization as large as the University of Iowa, with just over 31,000 students, different departments had to work together on wellness. There was just no other way.

Sibson Consulting, a benefits and HR consulting firm, conducted a study in 2011 into the value of a healthy campus, and the University of Iowa was one of 71 institutions of higher learning to participate. The firm’s research showed that there are three practices that lead to a successful wellness program, the first of which is strategic support. Having strong leadership from a program leader or committee helps increase the odds that a shared wellness vision can be achieved, the study found. And strong leadership is just what the liveWELL program had from the start.

“I think it’s important for us to look at the initiative from a systems view,” Troester said. “How do we engage our partners and look for opportunities where all of us can benefit? We’ve been fortunate enough to have excellent partnerships on campus with our recreational services department, our health science colleges and our university hospitals and clinics.”

At the University of Iowa, engagement began from within. From its inception in 1999, the pilot program that would become liveWELL was based on an integrated model driven by HR that encompasses health services; disability assistance; long-term disability; organizational effectiveness; workers’ compensation; insurance provider relationships; safety; recreational services; environmental health; and risk management. Representatives from these departments formed a management advisory board tasked with developing goals and initiatives in the areas of behavioral health, healthy campus nutrition, physical activity and outcomes analysis,” Troester said.

For example, as a result of the discussions, the Healthy Campus Nutrition Advisory Group was formed by the vice president of student services and the vice president of human resources in 2011. The advisory group developed an educational campaign focused on identifying foods that are low in fat and sodium and made with whole grains and fruit juice. Foods that meet these criteria are labeled with a UChoose label for easy identification by university staff and faculty.

But having representatives from these different areas of the instutition make university-wide decisions was not enough. Employees needed a voice.

“The other piece that we feel very strongly about is: How do we collaborate with our faculty and staff more directly?” Troester said.

The first step was to create a wellness ambassador group composed of 130 volunteers who would serve as local champions for health and wellness within their department, Troester said. This grassroots effort allowed HR to work collaboratively with employees on campus.

In addition, employees are surveyed annually on areas of interest related to personal health and wellness. Three questions were added to the end of the Personal Health Assessment survey so the liveWELL team could collect information for planning purposes on an annual basis.

These personal health assessments are the foundation of the liveWELL program and have been well-received by faculty and staff. According to the 2015 liveWELL year-end report, 73 percent of employees completed a personal health assessment that year, up from 61 percent in 2009.

 “It’s important for us to understand what our employees’ wants and interests are, not just where their health risks lie,” Troester said. “Our model is about using partnerships to achieve success and develop a culture of wellness at the University of Iowa.”

Value Vision Over Data

As wonderful as a culture of wellness is, the same question looms large over any organization’s efforts to keep employees healthy: What’s the bottom-line value? Employers want to know that they are gaining something for their efforts and investments, and it typically comes down to money. Fortunately for Troester and her liveWELL program, she has a solid answer.

A 2014 study of employee members in the University’s UIChoice health plan showed positive financial returns for those engaged in health and well-being services that year. Participants had lower adjusted average annual claim costs of $307.50. They also experienced a 7 percent lower health care cost trend overall from 2010 to 2013. For comparison, the U.S. Centers for Medicare and Medicaid Services anticipates out-of-pocket spending to increase to 5.7 percent by 2021.

“I am very proud of the health and wellness services offered through human resources,” said Kevin D. Ward, interim vice president for human resources at the University of Iowa. “These programs have had a significant impact related to improved health and quality of life for our faculty and staff. Services have also contributed substantially to our health care cost containment efforts.”

As important as health cost reduction is to an organization, Troester is equally if not more proud of her efforts to keep her eye on the big picture. And in this case the big picture is the community beyond the university’s campus.

In early 2015, the University of Iowa obtained a Blue Zones Worksite designation. The Blue Zones Project is an initiative by Healthways — a well-being improvement company — to turn communities into hotbeds of healthy choices. By hosting health fairs and other educational opportunities generating awareness of the cause, the University of Iowa is building momentum for the cause in the Iowa City community as well as sharing practices that have worked to keep their employees healthy.

“I believe that it’s all about looking at the big picture for important things that we can do to stay focused on where our efforts are directed in terms of our growth and development and how we can continue to innovate and achieve results for the University that we have thus far,” Troester said.

This story was updated Feb. 10 to reflect corrections to the LiveWELL program and the university’s Blue Zones Worksite designation.