Issue 

Brief #9 

For Employers 

This brief could save 

and takes less than 2 

minutes to read! 

An EAP that Addresses 

Substance Abuse Can 

Save You Money your company money 

Substance use disorders+ can negatively affect an employer’s bottom line by increasing health care costs and 

reducing productivity. But employers have a simple and cost-effective tool available for addressing these risks: a 

workplace substance abuse program administered through an Employee Assistance Program (EAP). 

DID YOU KNOW? 

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Employee Assistance Programs (EAPs) are designed to 

help identify and resolve productivity problems affecting employees who are impaired by personal concerns. 

EAPs come in many different forms, from telephonebased to on-site programs. Face-to-face programs provide more comprehensive services for employees with 

substance use disorders, including confidential screening, treatment referrals and follow-up care. Assuring 

that workers with substance use disorders receive treatment can help employers save money. Intervening early 

can prevent the need for more intensive treatment and 

hospitalizations down the road. 

EMPLOYERS SEE SAVINGS WHEN EAPs 

ADDRESS SUBSTANCE ABUSE 

80 percent of federal workers and their family 

members who received treatment for alcohol or 

drug problems through the Federal Occupational 

Health EAP reported improvements in work 

attendance. A majority also reported improvements 

in both work performance and social relationships.1 

ChevronTexaco found that from 1990 to 1996, 75 

percent of employees who entered the company 

EAP with alcohol problems were able to retain 

their employment, saving the company the cost of 

recruiting and training new employees.2 

Gillette Company saw a 75% drop in inpatient 

substance abuse treatment costs after implementing an EAP.3 

A large international holding company found that 

employees who used an EAP for help with mental 

health and substance use problems had fewer 

inpatient medical days than those who only participated in the company’s medical insurance plan. In 

addition, the company saved an average of 

$426,000 each year on mental health and substance 

abuse treatment as a result of employees’ participation in the EAP.4 

How Substance Abuse Impacts the Workplace 

Substance abuse costs the nation an estimated $276 billion 

a year.5 Lost work productivity and excess healthcare 

expenses account for the majority of those costs. The

magnitude of the cost, coupled with the fact that 76

percent of people with drug or alcohol problems are in the

work force6, gives employers a major stake in ensuring that

employees have access to treatment. 

Substance abuse by employees results in: 

♦ Higher healthcare expenses for injuries and illnesses, 

More absenteeism, 

Reductions in job productivity and performance, 

More workers’ compensation and disability claims and

Increased safety, and other, risks for employers.7 

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Conducting random drug testing and firing offending

employees can have a short-term impact but may

ultimately be more costly because the cost of replacing

employees is high and the risk remains that new employees 

may also abuse drugs or alcohol.8

HOW TO HIRE AN EAP 

1. Develop specifications and request proposals from 

several EAP vendors. 

2. Evaluate their capabilities, for example, the range 

of services they offer, the types of clients they 

currently serve, their ability to meet your 

company’s specific needs. 

3. Include performance standards in your EAP 

contract so you can measure the effectiveness of 

your investment. 

+The maladaptive pattern of substance use leading to clinically significant impairment 

or distress such as failure to fulfill social or occupational obligations or recurrent use in 

situations in which it is physically dangerous to do so or which end in legal problems. 

At some point, changes in the brain can turn abuse into addiction, a chronic, relapsing 

illness. Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition., pp. 181-183. 

Washington, DC: American Psychiatric Association, 1994. 
EAPs Can Reduce Costs 

Related to Substance Abuse 

EAPs address a wide variety of concerns that may

negatively affect job performance, including mental health

issues, financial and legal problems, career advancement 

and other personal problems. 

EAPs can: 

♦ Screen for risky behaviors involving alcohol and drugs; 

Educate employees about the health consequences of

substance use; 

When necessary, refer employees for appropriate 

treatment; and 

Provide support services that address recovery and the 

chronic nature of addiction 

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Incorporating a substance abuse component into an EAP 

can help reduce absenteeism, improve employee health 

and job performance, and reduce medical costs, all of 

which save employers money.9 

FAST FACTS 

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Replacing an employee costs from 25 percent to 

almost 200 percent of his or her annual 

compensation—not to mention the loss of 

institutional knowledge, service continuity, and 

coworker productivity and morale that can 

accompany employee turnover.10 

The Federal Occupational Health agency, in a 

prospective cost-benefit estimate of Employee 

Assistance Programs, showed that for every $1 

spent on the EAP, the expected savings for the 

first year would be $1.27, and those savings would 

rise to $7.21 by the fifth year.11 

Make an EAP Part of Your Benefits Package 

Most EAP providers charge for their services on a perperson basis, and annual fees of $12 to $30 per employee 

are common. It also is possible to contract with an EAP 

provider for services used, usually at an hourly rate.12 

Find an EAP Provider 

To locate a provider in your area, check local directories 

for EAPs and for substance use information and treatment 

centers. Good sources of information include chambers of 

commerce, trade associations and other employers, as well 

as local hospitals, health maintenance organizations and 

your insurance carrier. The Employee Assistance 

Professionals Association offers a Guide to Employee 

Assistance Programs and Services on its Web site: 

http://www.eapassn.org/public/providers/. 

For More Information 

- The Division of Workplace Programs in the Substance Abuse and Mental 

Health Services Administration offers an EAP “tip sheet” at 

http://workplace.samhsa.gov/WPWorkit/ts8.html. 

The Employee Assistance Professionals Association offers an online guide to 

EAP services at http://eapassn.org/public/providers. 

The U.S. Department of Labor’s Working Partners program provides 

information about EAP issues at http://www.dol.gov/asp/programs/ 

drugs/workingpartners/dfworkplace/ea.asp 

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References 

1 R. Selvik, D. Stephenson, C. Plaza and B. Sugden, “EAP Impact on Work, 

Relationship, and Health Outcomes,” Journal of Employee Assistance, Second Quarter 

2004, pp. 18-22.

2 C.R. Cummings, Testimony on workplace substance abuse prevention 

programs before the Subcommittee on National Security, International Affairs 

and Criminal Justice of the U.S. House of Representatives, 1996.

3 T.C. Blum and P.M. Roman, “Cost-Effectiveness and Preventive Implications

of EAPs,” U.S. DHHS, SAMHSA, Pub. No. RP0907, 1995.

4 Ibid.

5 Harwood, H., Fountain, D., & Livermore, G. (1998). The Economic Costs of 

Alcohol & Drug Abuse in the U.S. 1992. Rockville, MD: National Institute on Drug 

Abuse and National Institute on Alcohol Abuse and Alcoholism. 

http://www.nida.nih.gov/economiccosts/index.html . (Accessed 5-9-08). 6 SAMHSA, Office of Applied Studies, National Survey on Drug Use and Health

2005 and 2006: Table 5.8A. Rockville, MD, 2007. http://oas.samhsa.gov/ 

nsduh/2k6nsduh/tabs/Sect5peTabs1to13.pdf . (Accessed 5-7-08). 7 Harwood, H. J. & Reichman, M. B. (2000). The cost to employers of employee

alcohol abuse: A review of the literature in the USA. Bulletin on Narcotics, Vol. LII, 

Nos. 1 & 2. Geneva: United Nations Office on Drugs and Crime.

8 F. Leigh Branham, “Six Truths about Employee Turnover,” NY: American 

Management Association. http://www.nichebenefits.com/Library/sixtruths.pdf

(Accessed 5-19-08).

9 P.M. Roman and T.C. Blum, “The Workplace and Alcohol Problem

Prevention,” National Institute on Alcohol Abuse and Alcoholism. Alcohol

Research and Health, 26, no.1 (2002): 49-57. http://pubs.niaaa.nih.gov/

publications/arh26-1/49-57.htm . (Accessed 5-14-08). 10 Branham. Op Cit. 11 J. Wrich, An Employee Assistance Program Benefit to Cost Ratio: A

Prospective Estimate. Unpublished study prepared for DHHS, Federal 

Occupational Health, 1999.

12 Collins, Kenneth, 2001. Buying an EAP with Your

Eyes Open. Society for Human Resource Management. 

Alexandria, VA.

SMA 08-4350 - 2008