Wanting to add an EAP to your benefits package, but not sure how an EAP will fit into your budget? You’ve found the right place! This article will answer the question: How much do EAP programs cost, and so much more!
Feel free to share this article with other decision-makers at your company to help you through the EAP buying process.
How much do EAP programs cost?
According to the Employee Assistance Society of North America, EAPs have ranged in cost from $12 to $40 per employee per year in the last decade or so.
Typically, the larger the company, the less the employer will pay per employee. It is typical to pay more for the EAP the more it is utilized – but there is a better way!
How are EAPs priced?
EAPs have a few different pricing models:
- Inclusive pricing
- Value-based pricing
- Flat rate pricing
- Per-visit pricing
- Target range pricing
- Hybrid pricing
A common acronym you will hear when researching EAPs is “PEPM”. PEPM standing for “Per employee per month”.
This is the way we do things over at Nivati!
This model may offer a 60-day trial period on the EAP – so you can test it out with your team risk-free.
This model follows the PEPM (per employee per month) model. Generally, you will be able to choose from different packages or tiers. The lowest tier may include only on-demand content, while higher tiers allow more therapy sessions per employee. You may also have the option of having mental health training for your team with a licensed counselor.
Employee Assistance Programs that follow this model charge clients on a usage basis. The fewer employees that use the EAP, the less the employer will pay, and vice versa. This model is the reason the average EAP utilization rate is about 4.5%.
EAPs that use this model are incentivized to lower EAP utilization. Many EAPs that use this model have roadblocks like long waits for appointments, low response rates, and poor customer service. This leads to fewer employees getting the help they need!
This is the opposite of the Un-EAP Model. In a world where 25% of people have a mental illness and need mental health support, it is generally worth the premium to invest in an EAP that is incentivized to increase engagement.
The following models also charge more as utilization increases.
A type of value-based pricing, this model charges employers based on how many appointments are made by employees. These appointments may include therapy sessions, life coaching sessions, exercise classes, meditation classes, and more.
Target Range Pricing
This model combines PEPM and utilization rates to determine how much the employer will pay. The utilization fee is only paid if EAP utilization rates surpass a certain threshold.
The PEPM cost will be required no matter the utilization rate.
This model is similar to the target range model. Hybrid pricing models combine a fee per appointment and a PEPM fee. The PEPM rate is typically flat and low; the appointment fee is where the costs will rack up.
Flat Rate Pricing
This model charges the same amount for EAP services regardless of the services provided. The rate is usually determined by how many employees the company has.
Do employees have to pay for EAP access?
EAPs are covered by the company — so they are free for employees! Companies invest in EAPs for their staff to provide support before issues like burnout, depression, anxiety, overwhelm, work-life balance, and other factors affect their ability to work.
The Issue of Price vs. Value
How do you know if the cost of your EAP is worth it?
Does your EAP make supporting your employees a priority? EAPs with this mission are focused on bringing value to your team. The price justifies the value. Also, look for EAPs that offer a free trial so you can determine if the EAP will be a good fit for your team.
If you are considering an EAP that increases in price the more employees use it, be wary. It is best to pursue a pricing plan that follows PEPM or an inclusive pricing structure that does not increase costs with increased usage.
How much should my EAP cost?
Of course, EAPs should bring in more value for your team than the EAP costs. But what does value entail?
- Reduced burnout
- Improved retention
- Improved employee satisfaction and engagement
- Reduced employee absenteeism and presenteeism
- Improved employee morale
- Improved company culture
- Increased productivity
- Increased days taken off (yes, this is a good thing!)
All of these are connected to one thing: employee mental health.
When companies invest in EAPs that address employee mental health, the company starts to thrive. All the links above will direct you to resources that prove time and time again that investing in mental health support for your employees has significant benefits for your company and even the bottom line.
The best EAP providers will work with you to provide your specific team the best mental health support. They will provide advice, resources, and activities that will propel your team towards better mental health for all.
So – what are you waiting for? Now that you know more about how much EAP programs cost, let’s start thinking about choosing an EAP provider that is best for you.
For more answers to common EAP questions, check out our blog post: Employee Assistance Program Frequently Asked Questions.