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How to handle health benefits for remote workers

With employees potentially working from anywhere, companies need to be prepared to insure them everywhere.

Astounding numbers of companies adopted work-from-home and hybrid work models during the Covid-19 pandemic. But this advancement in work-life balance is also creating challenges for businesses. Some organizations are grappling with the issue of providing health insurance benefits in additional regions, countries and territories.

The possible solutions for this challenge depend on a number of factors: 

  • The location: Does the company already have a nexus in the region or country? What are the local or national requirements for health insurance?
  • The duration of stay: Is an employee permanently moving, temporarily moving or just traveling for business?
  • The company’s commitment: Is the organization striving to provide comparable health coverage to all employees, no matter their location?

In its 2021 Internationally Mobile Employee Benefits Design Survey of 107 global organizations, consultancy WTW (formerly Wilson Towers Watson) found that their top priority in selecting an international health plan provider was the ability to offer compliant medical coverage in all host and home countries. But 47% of those companies reported a gap in well-being services for international employees, specifically in telehealth and employee assistance programs (EAPs). 

“If the organization does not already have a legal entity in the country where an associate wants to work, the company risks triggering tax and social security obligations,” says Corinne Carles, ADP’s Compensation & Benefits Director, International. 

Increasingly dispersed remote teams are forcing companies to figure out solutions sooner rather than later. Ensuring equitable health coverage for remote workers might be costly, but employers that retain top talent are making the investment.

Health insurance options

There are five major ways for an employer to offer health coverage for remote employees:

1. Traditional health insurance: This option differs from country to country. Across the European Union, for example, public health insurance costs are split by employer and employee. This option is straightforward and offers stability. With this choice, a company engages directly with an insurance provider and will choose a health plan that addresses the needs of their remote workforce. Traditional health insurance is a viable option for an employer with a remote workforce within one country or region in which the health insurance provider operates. 

2. Global health insurance: With traditional health insurance not always a fit for remote workers, a new wave of health insurance providers has entered the market. These companies provide health insurance tailored towards remote workers, digital nomads and freelancers. These health plans offer flexible global coverage and online accessibility for mobile employees and their employers. The downside is that these plans are often very expensive.

3. Business travel insurance: Most companies will purchase additional business travel insurance for employees who frequently travel for work. These kinds of policies don’t cover routine medical care but would cover an emergency, including repatriation if necessary. It’s important to read the terms and conditions of coverage closely, as some of these policies cover people who are working in a foreign office — but not from home abroad. “Generally, business travel insurance will only consider travel to foreign offices,” Carles says. “I believe the world of business travel insurance is going to evolve to follow market trends, as we see more of these cases where people are working abroad but from a home.” 

4. Health stipends: Some companies might choose to avoid being directly involved in setting up health insurance for a remote worker. In such cases, companies will provide a uniform stipend to all of their remote workers that can be spent on health insurance plans or health services. The health stipend option is also viable for companies with internationally mobile employees. 

5.Using local partners or global PEOs: Another way to provide health benefits to remote workers is through a local partner or a global Professional Employment Organization (PEO). A local partner or global PEO becomes the employer of record in the needed location, and remote workers can receive health insurance through local insurance providers. For companies with larger dispersed teams, global PEOs are a better option.

Photo by Abby Anaday on Unsplash

Looking at the global landscape

Some companies might choose not to provide health insurance, especially in countries where health insurance is not tied to a specific employer, such as in the United Kingdom, Australia, Japan, Brazil or Canada. However, employers might find offering additional private health benefits attracts talent. 

Within Europe, an A1 form, or certificate of coverage, lets a worker from one country who is working in another continue paying into their home social security system while using local health insurance. For countries outside the E.U., there may be bilateral social security agreements that would allow for simplified coverage. 

“Several of our clients are moving to a ‘remote first’ structure, so the ability of health plans and other welfare programs to provide national access for both medical and behavioral health providers will be more important than ever in the future,” says Tracey Allen, vice president of employee benefits at Woodruff Sawyer, a U.S.-based global insurance broker. “Providing tools like telehealth and other online resources to healthcare is becoming increasingly important not only for remote work environments, but for healthcare in general.”

Virtual wellness packages saw an increase during the pandemic. According to a March 2021 survey by Randstad U.S., 41% of employers in the U.S. began offering new health and wellness benefits during the pandemic. The ADP Research Institute found in its HR XPerience Score research that employees who receive health benefits and use them are 3.5 times more likely to say HR is value promoting than those not offering health benefits.

“The world of business travel insurance is going to evolve to follow market trends.”

Corinne Carles, ADP

Some companies have continued offering these benefits as they take on more remote workers. Pinterest is offering wellness packages for its remote workers. In an interview, former Pinterest Global Benefits Leader Alice Vichaiti said: “We are already pretty flexible as a culture, but I think we learned to be even more flexible because everyone is going through different things. There isn’t a one-size-fits-all. We should lead with empathy and work with employees to see what works for their situation.”

As of July 2022, full-time employees who have been with Pinterest for at least six months can work from anywhere in the world for up to three months of the year. Pinterest said in a statement: “Our Pinners are global, and we know that having worldly perspectives in our company to support them — both at the technological level and the human level — will enable us to deliver on our mission to bring everyone the inspiration to create a life they love.”

Health benefits for remote work can be impactful for all employees when location and individual employee needs are taken into consideration. Employers are choosing to flow with new work cultures, and the next few years will be interesting to watch as remote work is adopted across different industries.  

“I predict that we will see continued progress in virtual healthcare delivery,” Allen says. “Not only will healthcare delivery be more technology focused, many employers are offering tools that provide real-time information on their employee benefits right at their fingertips.” 

Labor regulations have some catching up to do in the third year of the pandemic, especially in regards to working from home.

“Right now everything is structured around being at the office, and I don’t know how it’s going to evolve,” Carles says. “It’s hard to put up boundaries regarding the place of work — such as whether you’re working in your home office vs. working in your kitchen. I’m really interested in seeing how all of this evolves.”

Fiske Nyirongo

Based in Lusaka, Zambia, Fiske Nyirongo is a freelance writer and journalist. She has written for publications including Healthline, Black Ballad and GAVI. She is a staff writer at Meeting of Minds, a British publication tailored towards the stories of Black Women and girls. She is also a published children’s author and short story writer.