An undiscovered partner exists to help employment practices liability and other property-casualty insurers reduce the likelihood of claims caused by management missteps and problematic employee behavior--traditional employee assistance programs.
Traditional EAPs can penetrate organizations and target their "behavioral risks" with ongoing programs of prevention and intervention strategies that reduce a corporate customers exposure to loss.
However, many EAPs are not up to the task because they have changed over the past 20 years, which explains why you may have missed them as a potential element of your risk management strategy or product line.
Things, however, are changing.
A movement is afoot to re-engineer and promote EAPs and their original risk management focus that may attract p-c insurers. Many EA professionals are seeking to extricate the EAPs from the grips of managed care, which snatched them up as gate-keeping mechanisms to manage behavioral health care costs in the 1980s. A brief history of EAPs explains more.
Officially, EAPs sprang to life in 1969 when a large western copper mining company began a program to reduce costs associated with troubled employees. All kinds of troubled employees--from those with absenteeism problems to alcoholism to supervisors with perilous supervision practices. Over time, the emergence of a new "behavioral risk management" occupation spearheaded by in-house EAPs grew throughout the country.
This movement grew even more quickly in the late 1970s, when an outsourcing industry emerged to sell EAPs as an outsourced product. However, with this movement, the true value of EAPs diminished. Gone was the internal ability to penetrate deeply into the work culture and spot behavioral risks wherever they might appear. And also gone was the visible risk management results p-c insurers would have found fascinating and useful.
Still EAPs grew as they retained one of their most desired functions--assessment and referral of troubled employees. The external EAP vendors targets were their predecessors--in-house EAPs.
EAPs turned further away from their loss prevention roots when managed care spotted their usefulness in controlling health insurance dollars. The EAP vendors assess and refer service could be used as a first-line of defense against access to an employees mental health benefits.
Today most EAPs are seen, even by insurers and risk managers, as an "employee benefit" or a "mental health program" without any obvious linkage to the financial interests of p-c insurers. Several managed behavioral health companies now offer EAP-like services to most of the nations employees. However, EAPs initial foray into the world of risk management is mostly unknown. Things are changing, however.
There is a movement afoot to bring back the old model--a model that may attract p-c insurers and cause the formation of a new risk management and EAP partnership.
A few hundred traditional in-house EAPs are still found within some of Americas biggest corporations. Industrial social workers, professional counselors, or recovered alcoholic business and labor executives usually direct these programs. Most have learned the art of increasing their programs value by spotting new ways to reduce behavioral risk within the organization. And management loves them for it.
One large public school system in Virginia, the Arlington Public Schools, has slowly expanded its EAP staff from one to eight since 1979, even as budget cuts for other parts of the organization have been the rule. This organization won an award in 1997 for having the lowest level of p-c insurance-related claims for two years in a row of any school system in the state. Plenty of research attests to the reduction in costs an organization will experience with a well-run EAP managing behavioral risks.
In-house EAPs and their one-time nemesis, the EAP vendor, now have something in common. They are fighting for their survival against a growing common enemy--managed behavioral health selling a service called an EAP to business and industry as part of the health benefits package, but with virtually none of the attributes that make EAPs powerful loss prevention tools.
Unfortunately, managed cares public relations capacity has successfully educated most human resources, employee benefits and risk managers to a different reality of what EAPs are all about. This keeps the voice of truly-integrated EAPs from being heard. They remain a gold mine of loss prevention activity that p-c insurers, especially those specializing in EPL insurance, can tap.
EAPs--not the human resources department or company owner--are usually first to learn of an employees desire to sue the company. Insurers are often the last to learn of the bad news of an EPL lawsuit.
EAPs help employees get their needs met in more effective and less damaging ways to the employer. This is enabled by the assurance of confidentiality afforded by the organizations EAP policy. In other words, confidentiality becomes the key case-finding tool, and no occupation in the American workplace can lay claim to this advantage--not even the occupational health unit.
Indeed, EAPs utilize CFR 42 Part II confidentiality laws to protect all client records--the strictest privacy laws in existence. These protect alcohol and drug abuse client information.
Personal problems of employees frequently include complaints about the supervisor or the employer, and the EAP becomes an alternative dispute mechanism. And EAPs will always refer employees to any other alternative dispute channel. Avoiding EPL and other claims is no doubt the legacy of integrated, comprehensive EAPs.
Intervention at this level is not an HR consulting function for EAPs, but a relationship and supervision skill building function--the unique specialty of EAPs. Indeed, no occupation has more experience at helping supervisors learn how to supervise than EA professionals. They see it all.
EAPs have not helped themselves to attract EPL and other p-c insurers by demonstrating their cost-benefit over the past 20 years. Most EA professionals do not have a business mindset, so they have more often touted things like increased morale, savings on health care dollars, reduced turnover, and happier employees. These are valuable benefits, but they wont return EAPs to their glory days. These things pale in comparison to the millions of dollars recovered from loss, particularly in the EPL area.
EAPs have frequently been unaware of their own beneficial impact on business and industry--and they have been oblivious to the p-c insurance arena. Theyve stuck to the health insurance universe, but they are dancing with the wrong partner.
Employee assistance professionals want and need a new dance partner. And with the p-c industry they can get it. Thats because the p-c insurance industry is interested in much more than what the health industry seeks from EAPs.
Managed mental health care firms are not interested in issues such as reducing conflict between employees and supervisors, whether an employee is wrongfully discharged, or is taking drugs on the job.
Health insurers arent concerned whether an employee with a compensation-paid work injury comes back to work five days sooner, or whether morale in the workplace is good or not.
Managed care has no financial stake in absenteeism problems, theft, violence or property damage.
And the health insurance industry does not worry about supervisors who harass employees, EPL risk, grievances, or compliance with OSHA or labor laws.
The p-c industry cares deeply about these things and so do effective EAPs, traditionally managed or offered through responsible external providers.
EAPs offered by managed care do not address these issues, yet this is what millions think an EAP is all about.
A different model of EAP service delivery exists that can partner with, and be nurtured by p-c insurers. The first step is a national dialogue to identify innovation and product form.
The music is playing for a brighter risk management future with a new partnership of EAP programming innovation and service delivery within the grasp of p-c insurance industry.
Daniel A. Feerst is president of Behavioralrisk.com and DFA Publishing and Consulting in Manteo, N.C. He publishes the "FrontLine Supervisor" and "Frontline Employee," which are two workplace behavioral risk newsletters.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, August 12, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.