Benefits Considerations for Permanent Remote Workforces

Doug Ramsthel


July 15, 2021

Connected people working on computers around the world.

After transitioning most of their workforces to operate remotely, businesses are now deciding who to ask back to offices and who should remain remote. Before jumping full bore into an ongoing remote workforce situation, there are critical factors to consider regarding employee benefits.

Companies recognize that on the surface, working away from the office has its perks for employees. There are less workplace distractions like office drop-ins, impromptu meetings, and office noises, which can make it easier to focus for some people. People have also appreciated not having to spend large portions of their day commuting, and many have enjoyed an improved work-life balance.

For some, another perk of remote work has been the ability to not just work from home, but also relatives’ homes, favorite vacation spots, or even another country, so long as there was strong dependable internet. Some workers have gone so far as to make those favorite vacation spots a new home. Many employers, eager to ensure continued productivity and retain valuable employees, have rushed to support working away from the office making it easier than ever to be productive from anywhere. 

Now that employers are considering when, how, and if to bring employees back to the office, they must consider how employee benefits (a key component to attracting and retaining employees) function. Any company that plans to allow workers to truly work from anywhere should ensure their benefits programs will not be adversely affected by a remote workforce.

Physical and Virtual Access

Before your company embraces working from anywhere, carefully consider the complexities and nuances of giving employees free rein to choose where they choose. Benefits are sometimes limited or even very restricted by geography. For example, if Kaiser is a company’s primary medical plan, moving to a location where Kaiser is not offered leaves an employee with no or very limited medical coverage. Under a PPO plan, a less densely populated area may have a very limited network or perhaps out of network only coverage, exposing both the employer and employee to significantly increased claims costs. Telehealth services can help bridge the coverage gap in some situations. Rather than paying increased costs to see an out-of-network care provider in-person, an employee working remotely could get sufficient care and diagnosis via a video call with a physician who can phone in a prescription. But telehealth cannot offer every service in-person visits can.

Another change to consider is that disability may function entirely differently from state to state due to state-mandated disability coverage. There may be more simple limits to a benefits program too, like participation in the company wellness program, health fairs, or flu vaccines offered on-site. Understanding these limits and communicating them clearly to employees looking to relocate is extremely important for managing employee expectations and job satisfaction.

Effective Communication Methods 

Employees being potentially scattered across the country creates a new challenge when information about benefits needs to be disseminated. Employees already have video call fatigue and are often multi-tasking during calls, resulting in very little information being absorbed. Since physical meetings to discuss changes in benefits will not be possible, try to keep presentations and video training shorter in duration—preferably 10 to 20 minutes. Provide a higher frequency of communication to reinforce key concepts and messaging and be creative. While it will require a different type of planning, it is possible to host virtual health fairs during open enrollment with exercise and cooking classes, while peppering in benefits education. This type of interactive educational program has proven to be very successful.  

Varying Regional Nuances 

Unfortunately, there are many differences between states for required benefits, including commonly state short-term disability. Some states require employers to provide this benefit and regulate how it is provided. If an employee moves to one of these states, like New York or California, an employer will be required to provide the appropriate disability coverage. The statutory disability coverage can also impact any benefits under disability in which the employee may currently be enrolled. Some states do not allow tax-deductible H.S.A plans, which can be a bit of a shock for an employee who has relied on these for tax savings and any tax-free employer contributions. In Hawaii, benefit coverage, employee contributions, and plan design are regulated, requiring employers to provide coverage to even part-time employees. For employers new to a geographically diverse workforce, knowing, understanding and executing a wide variety of benefit plans can be overwhelming, and must be planned for in advance before giving employees the green light to pack their bags and relocate.

Impact on Attracting and Retaining Employees

According to an April 2021 report by McKinsey & Company, most employers have not clearly communicated their plans for post-pandemic work. This is making employees anxious, and 47% of employees surveyed feel lack of clear vision about post-pandemic work is a cause for concern. Most employees prefer a hybrid working model when returning to work, wanting more flexibility. 

If employers do not proactively communicate their plans to employees, they risk losing key employees to other companies that have been clear about their plans for remote or hybrid work arrangements. Not defining, implementing and communicating a return-to-work strategy could be very costly to businesses right now. Managing the many complications and nuances of benefits that work from anywhere can be overwhelming. Slow down and take the process step-by-step, keeping in mind the long-term advantages of embracing the virtual workplace.

Doug Ramsthel is executive vice president and partner at Burnham Benefits, a Baldwin Risk Partners Company, one of the top 50 employee benefit consulting firms in the United States. He consults employers across the U.S. on their benefit plan strategy, design, funding, and communication. Within Burnham, Doug not only helps provide firm leadership, but he is also the industry lead for hospitality and healthcare, and is also a co-founder of 360 Rx Solutions, a company dedicated to providing PBM transparency and value for self funded employers.