EAPs are an intrinsic part of group risk products, but how do you assess them? What are the tax implications? Paul Avis explains.
Traditionally purchased direct from providers, many group insurance contracts now offer ‘embedded' Employee Assistance Programmes (EAPs) and helplines. For advisers, the need to assess these alongside the insurance product is increasingly becoming a part of their evaluation of provider propositions.
With so many versions available, it is important to compare the service offered, should an organisation wish to remove the direct-pay service in favour of an ‘embedded' one. They do not always offer the same level of service.
An EAP can be a strategic and cost-effective workplace programme, able to assist productivity and attendance issues in the workplace. It supports employees, helping them to identify and resolve personal concerns that may affect job performance, such as health, marital relations, family, financial, alcohol, drugs, legal, emotional, stress, or other personal issues.
EAPs act as a gateway to a wide range of services and support functions. The use of an EAP service by an employee is voluntary and the vast majority of employees who use EAP services do so through self-referrals.
However, alongside these self-referrals an EAP must be able to accept referrals from other organisational parties, too, including union representatives, HR professionals and line managers.
The Employee Assistance Professionals Association (EAPA) is the trade and clinical audit body and provides a good benchmark for the acceptable quality of the service provision.
Services offered by an EAP can involve a blend of short-term solutions and focused support, such as counselling, money and debt management advice, information on caring for children and the elderly, and legal guidance. In addition, there is employee assistance for emotional and workplace issues and management guidance on handling workplace situations.
TAX guidance
Over the years, EAPs have become an integral tool in an organisation's attempts to engage employees and support the health and wellbeing of its workforce. Traditionally counselling services only, they now offer much fuller work/life support for employees.
It is important to stress that employees do not have to be experiencing problems to use the service, as there are many positive benefits of regular engagement for lifestyle guidance.
The Income Tax (Benefits in Kind) Regulations 2000 generally offers an exemption for welfare counselling, allowing it to be excluded from P11d considerations, subject to certain conditions.
