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The new trend in life cycle benefits.

* An alcoholic employee joins the company's fitness center where her alcoholism goes undetected by the staff. After several years, the alcohol problem progresses to the point that her work performance is seriously affected. Her supervisor documents these performance problems and ultimately refers her to the company employee assistance program. The EAP manager diagnoses the employee's alcoholism and arranges for appropriate treatment. The EAP counselor is furious with the fitness staffs oversight.

* A single parent is juggling roles, balancing the care of two children with his high-stress job involving much travel. Meanwhile, his elderly mother has become infirm and unable to live alone. This employee approaches the company EAP counselor, an external vendor, who gives the employee general advice, but no specific information on elder care resources. Unbeknown to this counselor, the company sponsors an elder care referral service. The employee believes, however, that this service deals only with child care concerns, and he decides to muddle through on his own.

* The spouse of an employee who has been depressed for several months calls the EAP of his wife's company for an appointment. He never pursued counseling; making the telephone call was difficult. After one session with the counselor, he is referred to outpatient care. To obtain full benefits he is required to call a managed mental health care vendor and to use a provider in the vendor's preferred provider network. He discovers he is required to see an "assessor" before he receives a referral. Desperate for help, he goes back for more assessment sessions.

CHILD CARE. FITNESS. EMPLOYEE ASSISTANCE PROgrams. Financial planning. Subsidized housing. Elder care. Literacy training. Organizations are jumping on the bandwagon, developing a variety of life cycle benefits designed to support employees and their families throughout their lives. These programs are offered by progressive organizations struggling to balance human resources and health cost management concerns of the next decade and beyond. A growing number of reports and surveys have documented what managers already know: Employees do not leave their personal problems at home. They take them to work, resulting in reduced productivity and increased health care costs for their companies.

Employers who offer these programs show commendable concern for their employees and understand the importance of their "human capital." It is unfortunate, in the face of many innovative experiments, many organizations sponsoring life cycle benefits do not assess the need for and the impact of these initiatives. Even fewer are developing them in an integrated and strategic fashion; life cycle programs are often isolated and in competition with each other. In an era of limited resources and increasing pressure for accountability, the result is often an inefficient use of tight funds, frequent lack of cooperation and synergy between programs and, consequently, diminished program impact.

While survey results vary, there are indications that life cycle benefits are growing and are more than a passing fad. This is especially true of those initiatives which help employees and their families cope with the problems of daily living. It appears the current recession has not affected the growth of life cycle benefits. In fact, many organizations seem to invest in life cycle benefits as a means of adjusting to difficult economic times.

Health promotion or wellness programs are sponsored by employers in all industries. Two-thirds of all employers and almost three-quarters of large to medium-size organizations have health promotion programs, according to a survey by the Alexander Consulting Group. In a survey of chief executives of large employers by William M. Mercer Inc., 56 percent indicated their companies sponsored a wellness program, up from 46 percent in 1985.

While health promotion initiatives are increasing, there appears to be a lack of faith in their potential for hard dollar savings. Although, ironically, there may be a strong belief in the intuitive value of prevention, 83 percent of Mercer's respondents indicated that positive employee relations was the reason for implementing a health promotion program, as opposed to 51 percent who cited cost containment.

EAPs have entered a new era of increased credibility and expanded development. A recent Hay-Higgins Survey found that 56 percent of companies offered EAPs to control cost. Organizations of all sizes are now perceiving EAPs as a way to address many health care issues with which they are struggling. This includes rising health care costs associated with mental health and substance abuse claims, stress management and workers' compensation. Whereas many EAPs started as alcohol or substance abuse management programs, the majority are now "broadbrush" and are approached to fulfill a variety of needs such as traumatic workplace occurrences, wellness and dependent care. Managed mental health programs which define and manage mental health and substance abuse benefits separately from the medical plan are becoming increasingly prevalent among larger employers, but are still offered by few employers overall. Five percent of A&A's survey respondents cited a carve-out program for mental health. Eighty percent cited inpatient limitations separate from the medical plans, and 73 percent noted such limitations on substance abuse.

Employee as Parent

Work/family benefits, or dependent care programs addressing child and elder care needs, appear to be springing up everywhere. These programs cross all boundaries within human resources and benefits departments. They can range from altered work schedules to parental/family leave programs, dependent care spending accounts, vouchers, educational programs, resource/assessment and referral, support groups and other services. Because they are so broad based, it is difficult to determine how many employers are entering the work/family benefits arena.

However, there has clearly been rapid growth, especially in child care. The Conference Board estimates that 5,400 employers sponsored some type of child care assistance in 1990, as opposed to only 110 in 1978. Seventeen percent of the respondents to the A&A survey offered an elder care program. A 1989 survey by Fortune magazine and John Hancock Financial Services, "Corporate and Employee Response to Caring for the Elderly: A National Survey of U.S. Companies and the Work Force," found that 26 alcoholism and substance abuse, and benefits managers are ruthless cost cutters.) Other obstacles include turf issues relating to departmental competition for funding and job security; lack of appropriate cross-training of staff and the resulting misdiagnoses and misunderstandings; rigid organizational structure and failure of high level personnel to initiate an integrated planning process; lack of contact among program managers; lack of initial time investment; blurring lines between disciplines and resulting confusion; and failure to collect data assessing specific programs, leaving planning to the realm of subjective politicking.

Integrated Models

Integration can be messy and complicated. There is no single cookie-cutter approach that all organizations can follow. There are, however, prototypes after which employers can model their programs, which depend on the degree of change and integration desired, as well as the number of benefits offered. The phased approach, or a hybrid model, can probably provide the most reasonable approach for many organizations.

Many employers offer a variety of life cycle benefits, but do not communicate them in a thorough and proactive fashion. For many employers, an appropriate starting point for developing integrated life cycle benefits lies in packaging and communications.

This can start with an inventory of existing programs, and a dialogue between life cycle program managers, followed by the development of a common philosophy, theme and identity for these programs. A communications campaign can be developed to focus on management, employees and family members. for this approach to work, communications must be ongoing, planned and be part of the organizational culture.

Communication as a method for developing an integrated approach has many advantages: It can provide a starting point for future efforts, an economical way to gradually change thought processes and increase employee consumer awareness. However, a communications-based approach does not necessarily lead to behavior change for employees, nor does it provide a life-planning mechanism for employees.


For many employers, the best place to start developing integrated life cycle benefits is by examining existing programs. Taking a fresh look at programs to better coordinate them does not have to be a mysterious process. It can start with two program managers; for example, the manager of both the EAP and the managed mental health program agree to work together. As an initial step, they can learn about each other's programs to identify redundancies, potential conflicts and an agenda for cooperation.

Similar comparisons can be made with EAPs and health promotion. For example, both emphasize prevention, often include stress management, are work site-based and productivity-focused, and offer wellness workshops. Yet, EAP and health promotion program managers often have negative stereotypes of each other, and incomplete knowledge, at best, of each other's discipline. joint strategic planning and providing stress management classes and staff in-service cross-training are a few examples of what EAPs and health promotion programs can do to integrate more effectively.

Likewise, EAPs and dependent care programs share common ground. EAPs have traditionally addressed dependent care like child and elder care. This was done directly by providing information and referral, and indirectly by providing counseling care for the whole family.

There is a strong case for integrating dependent care with an EAP using existing EAP structures. For example, EAPs offer assessment and referral, maintain information on community resources and providers, conduct employee and supervisory training and establish support groups. Yet, dependent care has its own set of issues, providers and skills. While integration of EAPs and dependent care is feasible and often appropriate, it must be done carefully and involve re-equipping the EAR

Flexible Benefits

Flexible benefits programs are another alternative. While not a panacea for the benefits and human resource management concerns of all organizations, they nonetheless represent an opportunity to integrate life cycle benefits. Increasingly, limited resources and changing workplace demographics--forces behind the need for integrated life cycle benefits--are becoming even stronger drivers of flexible benefits.

Flexible benefits can address many specific components of life cycle benefits. For instance, health promotion is increasingly becoming a part of flexible benefit programs. In the future, health risk factors and efforts to improve health risks will be increasing IV connected to flex credits. Flex credits can provide employees with more opportunity to trade time off to attend to percent of organizations offer information and referrals on elderly services.

The Big Picture

Employers have always sponsored life cycle benefits for their employees. Although they have not been labeled as such, traditional health, life and disability insurance programs are just a few examples of life cycle benefits. Recently, however, we have witnessed the growth of non-traditional life cycle benefits, which reach more proactively into employees' personal and professional lives, as well as into the workplace itself. EAPs, dependent care, health promotion and managed mental health are four major types of life cycle benefits, but they are by no means the only ones.

While life cycle benefits represent different disciplines and approaches to human resources management, there is also much they have in common. Viewed as a family of programs or individually, philosophic threads run through life cycle benefits. They all promote prevention-oriented well care systems, employee empowerment and consumer skills, life/career management support systems, a broad approach to organizational effectiveness beyond narrowly defined cost-containment strategies, and accommodation of diversity and individual needs.

The reasons for integrating programs are compelling. Yet, why don't all employers pursue an integrated approach? One reason is that life cycle benefits have unique and specialized elements. For example, elder care has separate issues which distinguishes it from child care despite their shared status as work/family programs. There are also instances when it is appropriate to unbundle services, to have different vendors for services, despite the employers' desire for "one-stop shopping." For example, some companies choose to have separate firms provide EAP and managed mental health services.

However, integration is not about services which cannot be distinguished from one another. Rather, it is about "big picture" thinking and appropriate links between specialized initiatives. The obstacles of cooperative life cycle programming include a failure to grasp the larger, strategic picture of how these programs can work together to create a well care system, combined with the various stereotypes which program managers have of each other (fitness directors are jocks, EAP managers are only interested in dependent care needs, or purchase extra dependent care payments for these situations. Credits for education or for those who increase their skill levels are possible. These credits could in turn be used for health care, dependent care or further education. Legal and financial services can also be incorporated into flexible benefits.

Performance flex can provide employees with flexibility for structuring an individualized benefits program tied to performance. Performance flex creates an entire compensation package for employees and includes such non-traditional benefits as alternate work arrangements. These arrangements could include flexible scheduling for employees with de pendent care responsibilities. In performance flex, the value of the total package, including noncash components, is emphasized. By tying cash and noncash compensation to performance, employers motivate employees by linking compensation with individual needs.

One-stop Shopping

Most employers want a single vendor to provide and manage life cycle benefits. Despite this desire, most organizations offer too many life cycle benefits to reasonably expect one vendor to provide all services. Moreover, just because one vendor is providing service doesn't necessarily mean that employees are entering a seamless, well-integrated system.

Despite these caveats, there are a growing number of health care and other service vendors which can each provide several life cycle benefits. For example, some EAP vendors provide both dependent care and managed mental health services. These vendors have either chosen to develop these capabilities internally, purchase other vendors or enter joint venture-type arrangements. Smaller companies with more limited resources, in the future, may look to the growing number of local family service agencies which have become attuned to work/family issues. Some local, community-based agencies now offer a variety of life cycle benefits, including sick child care, EAPs, adoption services and elder care.

Moving ahead, non-traditional life cycle benefits may be developed and managed from the ground up in an integrated manner. Dan Lanier, president of the Employee Assistance Professionals Association, suggests that these programs be united under the banner of employee assistance services (EAS). According to Mr. Lanier, EAS would cover mental and physical health, substance abuse, family/child activities, legal/financial activities and career development.

Life Planning

None of the ideas, ranging from repackaging to comprehensive EAS, will work effectively without appropriate, individualized life planning. Life planning ensures that employees, starting early in their adult lives, can actively manage their lives and careers; it joins the pieces of complex personal, family and career needs in the context of life cycle benefits offered.

Some organizations have provided life planning opportunities as part of preretirement or health promotion programs or with a personal vision workshop or downsizing programs. To be most effective, however, life planning should be an ongoing process addressing the needs of early, mid, and late career employees, in addition to retirees. Before specific life cycle benefit decisions are made, employees must establish long-term goals, "road maps" and milestones that form a foundation for benefits decisions. Life planning is not a onetime activity; rather, it is a continuous process.

In an ideal world, all life cycle benefits would be integrated. However, the real world is limited by the constraints of organizations sponsoring these benefits, as well as by available service providers. Despite these challenges and the frequent unbundling of these programs, there is a trend toward greater functional integration. A more pressing need exists to create effective links to help eliminate costly redundancy, hold program providers accountable and keep employees from bouncing around in a seemingly disjointed system of programs and policies.

Who can gain from the results of an effectively integrated menu of life cycle benefits? It might be an alcoholic whose disease is noticed by a fitness center manager early enough to prevent hospitalization and to save a life; or a single parent who can get the elder care support necessary to stay on the job and function during difficult times; or a spouse who isn't subjected to two rounds of assessment before receiving mental health care benefits. This all translates into both intangible and bottom line benefits for employers.

Deborah J. Lewis is an employee assistance management consultant for Ernst & Young in New York.

What Are Life Cycle Benefits?
 Employee assistance programs
 Long-term care insurance
 Health promotion programs
 Well baby care
 Prenatal courses/case management
Reimbursement for preventive procedures
 Periodic screening programs
 Preretirement training
 Stress management
 Health education
 Subsidized housing
 Managed mental health care
 Health education programs
 Consumer advocate telephone lines
 Retiree health programs
 Retiree support services
 Retiree hot-lines
 Part-time employment for retirees
 Retiree skill banks
 Retiree assistance programs
 Child care
 Elder care
 Parental/family leave
 Flexible scheduling
 Healthy environment programs
 Financial planning
 Literacy training
 Professional development
 Life planning
 Substance abuse education
 Safety education
 Flexible benefits
 Adoption benefits

Steps to integrate Benefits

1. CREATE A WORK GROUP delegated to make recommendations about life cycle benefits integration.

2. ASSESS THE SCOPE and extent of current life cycle benefits. Review expenditures, evaluation and data-based needs assessment.

3. CONSIDER ORGANIZATIONAL AND EMPLOYEE NEEDS. Obtain any missing data such as employee research, medical utilization data, and workers' compensation costs.

4. IDENTIFY THE LIFE CYCLE BENEFITS offered and the extent to which these needs are being met, exceeded or impeded by lack of coordination.

5. ENVISION AN IDEAL SYSTEM of integrated life cycle benefits and then modify it based on real world constraints. Consider alternative models of other corporations.

6. WRITE A DETAILED ACTION PLAN to address the development of program objectives, timetable, budget and expected savings, evaluation and continuous quality review, umbrella communications, case continuity, cross-training, contact between program managers, cross-referrals and information-sharing requirements, joint ongoing planning efforts and other needed data to evaluate impact. Allocate budget based on potential or actual program performance and eliminate redundancies.

7. IMPLEMENT THE INTEGRATED PROGRAM or features of existing programs.

8. ASSESS AND REDEFINE THE ROLE of the work group in the ongoing management and recreation of life cycle benefits.

9. RE-EVALUATE PERIODICALLY AND REVISE life cycle initiatives for ongoing flexibility.


Scope of Problem


Mental health problems, substance abuse and problems of daily living, including stress, marital, family, elder and child care, financial and legal.

Managed Mental Health Mental health and substance abuse problems. Depending on benefit plan, some management of problems of daily living, such as stress or marital problems.

Scope of Service


Assessment and referral

Short-term counseling

Provider network (inpatient, alternate care settings, outpatient, self-help groups)

Supervisory training and consultation

Prevention and wellness workshops


Organizational consultation

Managed Mental Health

Assessment and referral

Shon-term counseling

Formal provider network

Benefft redesign

Precertification of inpatient care

Case management

Follow-up and aftercare

Distinctive Features


Early intervention and prevention

Long-term follow-up

Worksite presence

Emphasis on organizational effectiveness/ productivity

Employee and family-centered

Managed Mental Health

Management of acute' phase of care

Delivery system expertise

Benefits and accountability

Provider centered



Worksite alcoholism programs

Performance problems

Managed Mental Health

Psychiatric case management, often for HMOs or other third parties as opposed to employer groups

Current Trend


Increasing fiscal accountability and formalization of informal systems (e.g., provider networks)

Development of a managed mental health approach

Managed Mental Health

Increasing emphasis on substance abuse and other EAP-like features

More focus on employee groups and employees

Early intervention

Greater understanding of broader human resources issues
COPYRIGHT 1991 Risk Management Society Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

Article Details
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Title Annotation:employee assistance programs
Author:Lewis, Deborah J.
Publication:Risk Management
Article Type:Cover Story
Date:Dec 1, 1991
Previous Article:What is the proper bidding approach?
Next Article:Uncovering the hidden costs of long-term disability.

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