Offering a comprehensive benefits package with health insurance is critical to having engaged and satisfied employees. But if your team includes some of the 22 million U.S. adults who work remotely, you may find it challenging to find a health plan that works1.
Plan types, health insurance providers, policy costs, and regulations vary by state. These inconsistencies can make it difficult for small employers with remote workers in multiple states to find a suitable health benefit. So what’s the solution?
In this article, we’ll discuss three comprehensive health benefits that can work for your remote employees, regardless of their state.
In this blog, you’ll learn:
- Various health insurance options for a remote workforce and the pros and cons of each.
- The difficulties of traditional group health insurance in supporting remote employees’ unique needs.
- How health reimbursement arrangements (HRAs) and health stipends can work as alternatives to traditional benefits.
Traditional group health insurance is a popular option for employers. With this benefit, you choose your company's group health plans and split the cost with your employees. You can buy group health coverage directly through a health insurance carrier. If you need help navigating plan options, you can also use a licensed agent or broker.
There are four standard group policy options:
Traditional group health insurance may seem like the obvious choice for remote workers. But it’s not always the best option.
Sometimes, your chosen insurance carrier may only operate in some states or counties. So, if you have remote workers across the U.S., they may not all be able to get coverage. Even if they can all secure medical coverage, they may have inconsistent experiences.
They typically can only enroll in a PPO plan, and their network providers and covered medical services will all vary. This lack of uniformity may result in low morale, poor job satisfaction, and high turnover.
If you’re determined to provide your remote team with group health insurance, there are two options:
Group plans have other challenges for small employers. If you have a limited budget, group plan premiums and annual rate hikes may not be doable. They also have minimum participation requirements that you may have trouble meeting. Lastly, they require you to understand annual plan renewals, costs, and policy changes, which can be hard to keep track of.
If you don’t think group health insurance is right for you or your remote workers, the following innovative solutions may be better.
Your best option for supporting your remote workers is a health reimbursement arrangement (HRA). An HRA is an employer-funded health benefit that allows you to reimburse employees tax-free for health insurance premiums and qualified out-of-pocket medical costs.
There are several different types of HRAs. But they all follow a basic structure. You set a monthly allowance that your employees can use for medical care. Once they make an approved purchase, you reimburse them up to their set allowance amount. Because HRAs are employer-owned, unused funds stay with you if an employee leaves your company.
HRAs are a flexible solution for employers of all sizes, locations, and budgets. They can help you attract and keep talented workers. But it’s essential to pick the right HRA for your business.
Let’s look at two types of HRAs that can work for remote employees:
The QSEHRA is for organizations with fewer than 50 FTEs that don't offer a group health or ancillary plan. With a QSEHRA, your remote employees can buy their own individual health insurance policy. Once they’ve selected a plan that works best for them, you’ll reimburse them for their premium.
You can also choose to reimburse them for other out-of-pocket healthcare expenses. This flexibility makes it easy for all your remote workers to get the comprehensive coverage they need.
Here is more information about the QSEHRA:
The simplicity and affordability of a QSEHRA make it an excellent solution for small businesses seeking a quality alternative to group health plans.
Your next option is an ICHRA. The ICHRA works like the QSHERA. You can reimburse employees for individual health insurance premiums and out-of-pocket expenses. But, there are a few notable differences. For example, it’s available for organizations of all sizes and has no maximum contribution limits. So not only can it support your remote employees, but it’s flexible enough to meet any employer’s needs.
Below are more highlights about the ICHRA:
Another way small businesses can provide health benefits to their remote workers is through a health insurance stipend. A stipend is essentially an increase in an employee’s salary. An employer provides a fixed amount of money to their employees, and employees use it how they choose. Unlike a group plan or an HRA, a stipend is not a formal health benefit.
With a stipend, you can offer your employees money to pay for health plan premiums and other out-of-pocket expenses. However, employers can’t require employees to use their stipend on healthcare items. They also can’t ask them to prove they purchased a medical plan.
Below are a few more features of health stipends:
Employee stipends are enticing for small employers who don’t want to deal with the administrative tasks or costs of group health insurance benefits. They can help employees with their healthcare costs regardless of location. However, an HRA is often the better option because stipends aren’t a formal benefit.
As more companies go remote, their benefits packages must also adapt. Selecting a health benefit for your remote, multi-state workforce has unique challenges. But if you research your options and understand what your remote workers want, you can offer the best benefit possible and improve recruitment, retention, and satisfaction.
If you’re ready to offer personalized health benefits to your remote workers, PeopleKeep can help! Our HRA administration software can support your entire team, no matter where they live. Better yet, you can design and manage your benefits in minutes per month, saving you time and money. Book a demo with an HRA specialist to get started!