8924 / Can remote work arrangements impact an employer’s employment benefit offerings or health insurance arrangements?

Employers who are considering more permanent remote work arrangements should also consider how those arrangements could impact their employer-sponsored health insurance offerings. When it comes to available health care providers, some employer plans are selected to provide the strongest offerings near the employer’s worksite. Remote workers may not have access to in-network offerings and could, therefore, be required to pay higher costs to out-of-network health providers near their new home offices.

It is also possible that an employee who moves to another state due to the availability of remote work could lose their access to health care in the new state of residence, depending upon the terms of the health insurance plan in question. Employers may be required to establish multiple health plan options for employees in specific locations or select an insurance carrier with more widespread national coverage.

As an alternative, employers may wish to consider offering individual coverage health reimbursement arrangements (ICHRAs, see Q ), which allow an employer to reimburse employees for individual health insurance premiums via the HRA structure on a tax-preferred basis.

Employers should also consider the impact of state and local leave laws where the employee performs work. Those laws may require the employer to offer paid time off based on requirements that differ from the employer’s primary business location. Note that the applicability of those laws are based on where the employee lives.¹

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1.  See, e.g., New York’s state-level paid sick leave law, which applies to employers with five or more employees: https://www.ny.gov/programs/new-york-paid-sick-leave (last accessed Sept. 30, 2024).