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Handling Health Insurance for Remote Workers

Since the COVID-19 pandemic, more employers are allowing their staff to work remotely on a permanent basis, often allowing them to never have to set foot in the office again.

This newfound freedom for American workers has allowed many of them to leave the cities they were living in for small towns or even more remote areas around the country. But for employers who have instituted work-from-home policies, they are faced with navigating a more confusing employee benefits landscape.

This is becoming more common as more people work from home. The ranks of remote workers have boomed in recent years, increasing to 27.6 million (or 17.9% of the working population) in 2021 from 9 million (5.7%) in 2019, according to the 2021 “American Community Survey” conducted by the U.S. Census Bureau.

Employers will typically purchase group health insurance with networks that are mainly local or regional. This makes sense for a company with one location or multiple locations in a city or region, since all the employees will be living near work.

But when an employee moves, they can’t take the network with them, and the employer will need to make new coverage arrangements.

If you allow your employees to work remotely, you have a few options for those who plan to move out of state.

The PPO option

If they are currently enrolled in a health maintenance organization, they would have to give up their plan, since HMO plans contract just with medical providers in a specific area. Preferred provider organizations also have networks with which they contract, but some of the nation’s largest PPOs offer more flexibility.

The main thing is having a way out of the HMO contract, as that usually requires a “qualifying event.” If an employee moves out of state or out of an HMO’s service area, that would likely be considered a qualifying event to allow them to choose a new health plan.

The answer for most employers is to place the worker in a nationwide PPO. One of the most common choices is Blue Cross/Blue Shield because of the breadth of its coverage. But some other large players may also offer a good PPO plan that can be used anywhere in the country.

As your health insurance broker, we can help you with this process and ensure that your employees are set up with coverage, wherever they are moving.

Another option

Some employers are taking another approach to out-of-state remote workers. They are setting up individual coverage health reimbursement arrangements (ICHRA), which they fund with pre-tax money that the employees can use to purchase a health plan on an Affordable Care Act exchange.

ICHRAs were made legal during the Trump administration to give employers another option for helping their workers secure health coverage. Some ICHRA administrators are also available to help ensure that the contributions comply with the ACA affordability test and to help plan enrollees choose coverage that is best for them.

Employees moving out of state?

During your next open enrollment, if you have workers who live out of state, you’ll want to ensure they have a plan that they can use in their area. If they are already enrolled in a PPO, that’s a good start, as they are more likely to have dispersed networks.

We can help you review your current plan offerings, and in particular your PPOs. We’ll look for PPOs that have networks that allow enrollees to use in-network benefits in any state.

It’s important that you have a policy requiring your remote staff to notify you if they plan to move out of state, so you can start the process of changing health plans. Both you and the employee (and their family) will want to ensure that they have continuity of coverage if they move.