Factoring Employee Benefit Impact Into Future Remote Workforce Plans

After transitioning most of their workforces to operate remotely for the past year, businesses now face the decision of if and when to have employees return to offices. Before jumping full bore into an ongoing remote workforce situation, there are critical factors to be considered when it comes to employee benefits.

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

For many people, another 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.

The elephant in the room now that employers are considering when, how, and if to bring employees back to the office is how do employee benefits (a key component to attracting and retaining employees) function in this new work-from-anywhere world? In 2020 many employers experience a decrease in employee benefit costs. The main factor in this was the fact that many people delayed and avoided health screenings and procedures during the pandemic. According to a survey by Aon, the average decrease in employer healthcare costs in 2020 was five percent, and a two percent average increase is expected in 2021. This increase in costs this year is being attributed to both the cost of care for COVID and people catching up on care that was skipped last year.

Any company that plans to allow workers to truly work from anywhere moving forward should focus on ensuring their benefits programs address:

Physical and Virtual Access
Before your company embraces working from anywhere, carefully consider the complexities and nuances of giving employees free rein of working from the environment of their choosing, without managing their expectations of significant challenges in the benefits your company offers. 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. Telehealth services can help bridge the coverage cap 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. Another change to be considered is that 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. 

Effective Communication Methods
Technology-aided attention deficit disorder was here well before COVID, but now it attacks with a sweeping vengeance. Video conference call upon video conference call produces attention fatigue. Most people are guilty of answering emails and texts on these calls while pretending to pay attention. Scientists have provided much data over the years that prove multitasking and lack of focus limit the ability for best thinking outcomes and reduce productivity. But most people charge on, ignoring this advice and doing as much at once as possible. Employers must cut through all of this noise and communicate and develop an understanding of their programs in a fresh and concise manner, beyond just the obvious of conducting all this virtually. What has been successful this past year is shorter, more frequent messaging. Keep presentations and video training shorter in duration, 20 minutes or less, preferably 10 minutes. Also, do remember cybersecurity is critical during remote working. Employees should be provided the best vpn for mac or their specific computers. 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. Making use of Online Conference Management software and tools can aid well in hosting a successful interactive educational program.

Varying Regional Nuances
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 where 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 HSA 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.

Embracing Technology
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 enough 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 now is the time to re-examine just how efficient and user-friendly the benefits administration system is.  With the complicated virtual world now, and competing priorities, 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 magnet 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.

Impact on Attracting and Retaining Employees
According to a recent report by McKinsey & Company (April 1, 2021), most employers have not clearly communicated their plans for post-pandemic work. This is making employees anxious, as 47 percent of employees surveyed feel lack of clear vision about post-pandemic work is a cause for concern. Most employees prefer a hybrid work model when returning to work, wanting more flexibility.

If employers are not proactive in communicating their plans to employees now there is a risk of losing key individuals to other companies who have been clear about allowing for remote work or a hybrid working arrangement. Not defining, implementing and communicating a return-to-work strategy could be very costly to businesses right now, as we all are seeing the economy begin to return to normal.

Managing the many complications and nuances of benefits that work from anywhere 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-but do not forget to weigh the impact this will have on a benefits program.

Doug Ramsthel, CFP, is EVP and 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 U.S. on their benefit plan strategy, design, funding, and communication. With health insurance being the major cost for most employers, he has been successful in helping employers creatively reduce costs while not compromising the quality of benefits offered to employees. He is a recognized specialist in self-funding, consumer driven healthcare, underwriting, and financial analysis. Within Burnham, Ramsthel 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.

Ramsthel has worked in the industry since 1986, and prior to joining Burnham, worked at several large health insurance companies becoming very familiar with the insurance company perspective on health costs, tools to contain costs, operation and underwriting. He also spent several years with Deloitte Consulting.

He obtained his B.S. in Economics from the University of Oregon, Magna Cum Laude, Phi Beta Kappa.

Ramsthel is a member of the International Foundation of Employee Benefit Plans (IFEBP). He contributed articles to several trade industry publications, including California Broker, World at Work, Consumer Driven Healthcare, and quoted in the Orange County Business Journal on HSA plans.

Ramsthel can be reached by telephone at 949-252-4570. Email: ramsthel@burnhambenefits.com.