I was blessed to enter the group benefits marketplace at a time when Employee and Family Assistance Programs (EFAPs) were just starting to become mainstream. Some might say that an untrained monkey could have sold EFAPs in that market (some might be right), but for now let’s just assume it was my charm, wit and salesmanship, it’s a theory I like to hold to. Glory days. Let me have this.

You may also be surprised, or perhaps you remember, that back in those good ole days, EFAPs were experience-rated, and they usually started at about $8 per employee per month but quickly jumped up into the teens if you actually used the program.

Fast forward to today; and EFAP has essentially become a commodity. The EFAP companies don’t want to admit that, and they are racing to try to offer more products and services than their competitors; but the core of EFAP – the counselling – is pretty much the same whatever company you choose. EFAP has become big business, with rampant consolidation and diversification in an effort to develop a more profitable business model.

Today, a typical EFAP rate is closer to $4. I’ve seen them as low as $2 on larger groups. Competition has caused a race to the bottom that is now catching up to us in terms of quality. By quality I don’t mean the intake process, mobile apps, poster etc. The platform is working just fine, and they have lovely posters. What I am referring to is the actual counselling.

Oh right, that.

It seems that this rather important piece of the model is being compromised.

In the old days, EFAP attracted top quality Counsellors, and they were paid well for their service. The pricing model back then had room to pay well. Today, the reduced EFAP rate, shareholder demands, and costly investments into infrastructure has pushed EFAP to the breaking point.

Let’s imagine that I’m a Psychologist (just for fun let’s say I’m a really good one) and I have a thriving practice. I can charge a fair rate for my time because I have a waiting list. The last thing I need is to contract with an EFAP provider who will make me share in the revenue and also have rules I need to follow. So, who is contracting with the EFAP providers? Well, I know for a fact there are a lot of good counsellors that do, but I’ve also dealt with an increasing number of complaints that show that there is a problem. Some of the complaints have frankly been shocking.

One of our clients is a large social services employer in Alberta. Their employees have tough jobs, and they are trained in counselling themselves. Based on what we were hearing, we were suspect of the EFAP providers 95% satisfaction assertion, so we did our own survey of the staff there. We asked four questions:

1. Have you used the EFAP service in the last two years? 80 respondents said yes
2. If yes, were you satisfied with your EFAP experience? 45% of respondents said yes
3. Would you use EFAP again? 55% of respondents said yes
4. Would you recommend the EFAP to others? 45% of respondents said yes

O.k., I know what you are saying (I think) and you’re right. This is a small sample size and these employees are trained Psychologists and Social Workers, so they’re going to be harder on the EFAP then your employees. Correct, and not disputed. All that said, the responses were nowhere near the 95% satisfaction rate that the EFAP providers use. And many of the comments – and there were a lot – mentioned the inexperience of the counsellor. Keep in mind that the 95% satisfaction rate used by the providers comes from a voluntary survey that people are asked to complete at the end of their counselling. I don’t know about you, but if I’m unhappy with a service, I’d likely just blow off the survey. Very Canadian of me, eh?

I’ve been telling this story for a few years; many of you have heard it: we’ve pushed the pricing on EFAPs down so low while demanding more and more of the program. Somewhere along the line we’ve maybe forgotten that the core of the model still involves what we hope is a highly trained, empathetic Psychologist or Social Worker who is taking care of me, my family and my employees in an unhurried, respectful and professional manner. We don’t like to think about these counsellors being overworked, underpaid and stressed-out themselves.

I was recently surprised to hear that one of the largest EFAP providers in Canada has implemented a 4-session ‘clinical check in’. What’s that you ask? Well, it’s not been easy to figure out, but it appears that there might be a lack of trust between the provider and their counsellors, and some counsellors may be pushing the number of sessions past what the provider feels is ‘clinically appropriate’. The cynic in me wonders if that means ‘profitable’. Not to vilify the provider – business is business and if you’re only paying $4 per employee per month for the service, they MUST be concerned about how many sessions are being provided. The provider receives a finite amount of revenue (premium), the counsellor is the expense (claims); and the more sessions they provide the less profit is realized. So now if a member reaches the four-session point, the counsellor is required to ‘check in’ with the provider and essentially make a case for continued counselling.

The EFAP model has always espoused a Short-Term clinical model, so this remains unchanged. What is changing is the decision to continue counselling after 4 sessions must now be approved by the provider, not solely at the discretion of the counsellor. This is a material change as it could result in less hours of counselling for your employees, or a disruption in the counselling. As well, there will be a mandated one-month ‘break’ in counselling following the 4^th session. This too, is material, and may in some cases be an interruption to the flow of the counselling sessions.

This change is being made to ensure accountability to the counsellors to only continue counselling when it is clinically appropriate to do so. In the past, there has been limited situations where a counselor may have continued a counselling regime for their own benefit, as opposed to the member actually needing continued sessions.

If you would rather not think about the EFAP industry as, well, an industry, then you are not alone. But the fact is, it’s become big business, and shareholders demand returns.

Recently I’ve been asked by several clients to consider a fee-for-service hourly rate on their EFAP rather than the typical per person per month rate. It’s a very simple calculation because they track the number of hours of counselling provided. Perhaps not surprisingly, it rarely works out – if you actually consider what it costs to pay a Psychologist or Social Worker, then we are getting a screamin’ deal on the monthly rate. See where I’m going with this? Somewhere…someone, isn’t getting paid what they are worth and yet we’re asking them to care for us at our most vulnerable times.

So, what’s the answer? Well, I wish I knew. What I’d propose is that we all pay a bit more for EFAP and get the quality back, but there are two very obvious reasons why that’ll never work:

1. Plan advisors and their clients keep leveraging the EFAPs against each other in competitive bids to drive the price down, and business development folks at the EFAP providers keep agreeing to do it, and
2. Well, we’d all have to agree to do it.

But if you consider how much you pay for Health and Dental single/family rates and then compare that to what you pay for EFAP – you just might agree that, to be frank, EFAP is pretty cheap.

So why am I writing this article if I don’t have any answers? Well, firstly I want people to see the EFAP industry for what it is, because I’m spending more time lately trying to defend it to my clients.

Secondly, for some employers at least, it might be time to try something new. We’ve seen some clients move to hire Psychologist(s) to work on-site either. This obviously works best in a centralized office with a lot of employees. The clinician becomes part of the work community and can do all kinds of innovative things to improve the mental wellness of the organization.

A similar model is to partner with a boutique EFAP provider or even a small Psychology/Social Work practice to provide what is essentially a modified EFAP.

Finally, we’ve seen a number of our clients move to bolster the Psychology benefit under the core benefits program – increasing it from the typical $500 to $1,000, $2,000, even $5,000 per year in one case. Interestingly, it doesn’t cost a lot to do that (rate-wise), and it sends a wonderful message to your employees that the employer cares for their mental health. It increases claims, but rarely materially compared to Drugs and Basic Dental. Also, it allows the members to go to a Psychologist or Social Worker of their choosing, rather than the EFAP model.

We’ve also seen more requests to add coverage for Counsellors, who do not have the same credentials as Psychologists and Social Workers but are still highly trained and provide timely assistance.

Regardless of the solution, I think the conversation is worthwhile. In the case of our client whose survey revealed less than stellar EFAP satisfaction, they used that data to greatly enhance their Psychology and Social Work benefit. At the same time, they focused their promotion of the EFAP more on the ancillary benefits that it provides and its availability to part-time employees who aren’t covered by the core benefits plan.

EFAP still has many positive features and works well for many people, but the price that we have pushed it to eventually has to impact the quality; and I think we’ve reached that point.

To chat more about this or ways that you can enhance the mental health of your workforce, please give us a call. We have ideas.