Does Working From Home Negatively Impact Employee Benefits?

By Doug Ramsthel.

Even before the pandemic some CPAs worked from home, running their own small firms providing services for local businesses and individuals. For CPAs who work for larger firms and were in an office setting daily, shifting to remote work was a new frontier and one that some people really enjoyed. Working away from the office has its perks, like the ability to focus and remove workplace distractions, such as office drop-ins, impromptu meetings, and office noises.

For many people, a perk of all meetings taking place remotely 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.

Employers, eager to ensure continued productivity and retain valuable employees, have rushed in to support working away from the office making it easier than ever before to be productive from anywhere. As businesses make decisions about a return to workplaces this summer or fall, those that are considering allowing employees to continue to work remotely will need to consider how it will impact employees’ benefits.

Location, location, location

Benefits are sometimes limited or even very restricted by geography. As an example, if Kaiser is a company’s primary medical plan, moving to a location outside of where Kaiser is 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. Disability may function entirely differently from state to state due to state-mandated disability coverage. Also, there may be more simple limits to the benefits program like participation in the company wellness program, health fairs, or flu vaccines offered on-site. Understanding these limits and communicating these clearly to the employee who is looking to relocate is extremely important to managing employee expectations and ultimately job satisfaction.

Unfortunately, there are a lot of differences between states in not just taxes, but also required benefits. State short-term disability is a common difference. Some states require employers to provide this and regulate how it is to be 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 the employee may currently be enrolled in. Some states do not allow for the tax-deductibility of 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 a place like 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 it is a maze that must be planned for in advance before giving employees the green light to pack their bags and relocate.

The time to embrace technology is now

For the few companies who have not embraced technology for enrolling employees in benefits and managing changes to plans, now is the time to just do it. Too long employers have assumed that not every employee will have adequate technology access to use the HRIS/Benefits Administration system, but almost every employee does now with the advances that have been made in mobile technology. For companies that already use an HRIS/Benefits Administration system, re-examine just how efficient and user-friendly the benefits administration system is.

A company’s benefits administration system needs to be clear and easy for employees to understand and use. With the enhancements and improvement of UX (user experience), consider making this tool a magnate for employees as a place to go for learning and development, company community, and company values and culture. Leaning on these tools to fill in the natural office culture and sense of community that occurs when everyone is together in a workplace, but is lacking when employees work from anywhere, has never been more important.

Managing the many complications and nuances of benefits that work from anywhere requires can be overwhelming. Slow down and take the process step-by-step and consider how in the long run embracing the virtual workplace can result in a more productive, engaged and happy workforce than was ever possible within the confines of an office.

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Doug Ramsthel is a 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 US on their benefit plan strategy, design, funding, and communication.