Paper Trails

What is an Employee Assistance Program?

Did you know that, according to a studies, businesses that invest in Employee Assistance Programs (EAPs) report at least a 3 to 1 return on investment? This return is primarily seen through reduced absenteeism and increased productivity. In today’s fast-paced and often high-stress work environments, the mental and emotional well-being of employees is more critical than ever.

In this article, we will answer the question, “What is an Employee Assistance Program?”.  As a business owner or HR professional, you may be looking for ways to attract candidates to your business and increase your employee retention. By the time you finish reading, you’ll understand what an EAP is, the benefits it can offer both your employees and your business, how to start an EAP, and what costs you might expect to incur.   At Paper Trails, we are committed to providing any and all resources to small business owners that can help them navigate the world on entrepreneurship, and this article is an extension of that.

What is an Employee Assistance Program?

An Employee Assistance Program (EAP) is a type of non-taxable fringe benefit that employers can setup for their employees.  It is a work-based intervention program designed to identify and assist employees in resolving personal problems that may adversely affect their job performance, health, and well-being. EAPs extend beyond just work-related issues, offering support for a wide range of personal challenges including:

  • mental health concerns
  • substance abuse
  • financial or legal troubles
  • relationship issues
  • family problems

Typically, these services are confidential and provided at no cost to employees, making them a valuable resource within any organization.

What are the benefits of an Employee Assistance Program?

EAPs offer many benefits for both employees and employers, making them a great addition to any workplace. For employees, access to EAP services can lead to improved mental health, better work-life balance, and enhanced job satisfaction. For employers, the benefits include:

  • Increased Productivity: By addressing personal and work-related problems, EAPs help employees focus better at work, thereby boosting overall productivity.
  • Reduced Absenteeism: EAPs can help reduce the number of days employees are absent by addressing the root causes of their issues.
  • Lowered Healthcare Costs: By providing early intervention, EAPs can reduce the need for more extensive health care treatments in the future.
  • Improved Employee Retention: EAPs demonstrate an employer’s commitment to their employees’ well-being, which can enhance loyalty and reduce turnover rates.

How do employers start an EAP?

Starting an EAP for your business involves several key steps:

  1. Assess Your Needs: Understand the specific needs of your workforce. This might involve conducting surveys or consultations to identify the types of issues your employees face.
  2. Choose the Right Provider: Select an EAP provider that fits your organization’s needs and budget. Consider factors like the range of services offered, availability and support, and the provider’s experience with similar-sized companies.
  3. Plan Your Implementation: Work with the provider to develop a plan for launching the EAP. This includes deciding on the scope of services, communication strategies, and any training for managers or HR staff.
  4. Launch and Promote the Program: Ensure employees are aware of the EAP and understand how to access services. Regular communication and promotion are key to maximizing utilization.
  5. Monitor and Evaluate: Collect feedback to assess the program’s impact and make adjustments as necessary to meet your employees’ needs.

What are the legal requirements of an EAP?

If your business is considering an EAP, be sure to know your legal requirements. Ensuring confidentiality is fundamental to the success of Employee Assistance Programs (EAPs). Under laws like the Health Insurance Portability and Accountability Act (HIPAA), any discussions regarding an employee’s health during EAP sessions are strictly confidential. Exceptions to this confidentiality are rare, limited to situations where there’s a threat to workplace safety or a legal requirement. Employers should consult with legal experts to navigate privacy laws and ensure their EAP aligns with legal standards and protects employee privacy.

What are the costs to employers associated with an EAP?

The cost of an EAP can vary widely depending on the size of your organization, the range of services offered, and the provider you choose. Typically, employers can expect to pay a per-employee-per-month (PEPM) fee.  This fee can range from a few dollars to upwards of $35 per employee. Despite the upfront costs, the potential return on investment from improved productivity, reduced healthcare expenses, and lower absenteeism can be significant. When considering an EAP, be sure to weigh these long-term benefits against the initial costs.


Implementing an Employee Assistance Program can be a game-changer for businesses of all sizes.  It is a great option particularly for small businesses looking to support their employees’ well-being while enhancing their company’s productivity and retention. By understanding what an EAP is, the benefits it offers, how to start one, and what costs are involved, small business owners and HR professionals are well-equipped to make informed decisions about integrating these programs into their workplace wellness strategies.  Contact our team to learn more about other strategies to help attract and retain talent in your business.