Remote Employees and Insurance Benefits

The Covid-19 pandemic has changed everything in our society, and now we could see job classes change for all size companies.  Through the pandemic, it has been proven employees can be productive working remotely and, in some cases, more productive. We are seeing different employee class terminology being thrown around by tech companies:

Flex employee- This class of employees comes onsite maybe a couple of times a week.
Fully Remote- Just like it sounds, this class does not visit corporate headquarters.
Office-Based- Traditional workforce that comes into the office every day. It predicted this would be the smallest class of employees in the future.

What impact will the new work classes have on Insurance Benefits?

Large Corporations:

Most large company’s HR departments are already well versed in recruiting remote employees. They are in tune with their current insurance offerings, especially if their health benefits have a national provider network. The national provider network is critical when determining if that remote employee will have access to their local medical providers.  

They also have the resources in place to understand different state laws that impact them hiring remotely.  

Medium-Sized Companies:

Companies with under 500 employees may find obstacles when most of their employees become remote. These companies will have to evaluate their current group health insurance to see if they offer national networks with adequate network access for remote employees.  They will also have to analyze their network access fees and determine if they are paying too much to use that network.   There will be multiple areas that HR and CFO’s may have to look at that in the past were nonissues.  The state compliance piece could create additional administration responsibilities; otherwise, they have not had to address.

Small Companies

Companies under 200 lives with limited resources for HR will find themselves leaning heavily on their advisors for guidance.  HMO networks’ re-emergence with attractive cost savings and integrated care models may not work for remote employees.  Small groups may be forced to consider outside of the box options for remote employees.  The new Health Reimbursement Accounts could play a role in providing a tax-free benefit to out of state employees.   Small companies are going to have to adopt a digital onboarding system. The day’s of sending paper PDF’s of Insurance Benefits is not going to give an out of state/remote employee the best second impression of their new employer.  Small groups should consider a customized benefit admin system that a new hire can log into from a mobile device whenever they want and view plans and cost before making plan selections.  If you are going to recruit remote employees, having a benefits admin platform is essential. We see groups give the prospective employee access to the benefits offering prior to them deciding to accept the position.

Insurance Industry:

The insurance industry is going to have to adjust to the future employee classes. One of the first things is they will have to change requirements in their insurance contracts of x % of employees being domiciled in the home state, which is common with fully insured contracts—developing plans that address multiple out of state pharmacies being in the network.  We could see what was once considered a radical approach of all mail order being the norm. 

The Increase network provider will continue to be an important aspect of every insurance contract, especially if we see a shift to remote employees living in rural communities.  The Insurance companies will also have to change the tax documents that use to prove an employee and employer relationship (Wage N Tax).  Every state has different filing requirements.

How is Nefouse & Associates Inc Adjusting?

We have been handling clients that have been engaged in hiring remote employees for over two decades. In the last five years, the remote employee has become more than just a trend.  We have had to address these issues and additional for our clients as they have had to engage in remote hiring.

With the prediction that most employees could be remote, this could create a huge obstacle for small companies who now must quickly change and adapt to this new environment.  These issues are not new, but they may become new for many small Indiana employers who must change their company culture.  Some companies may not be ready to address these challenges on their own.

Recently a wise and successful entrepreneur said, In the past, we have had to reinvent ourselves every seven years, now it’s every three years. This new employee class may be an area where employers must reinvent themselves.

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