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The remote workplace movement sparked by the pandemic means not only will more employees be working away from the home office, but a growing number will be living hundreds, perhaps thousands, of miles away.
Much has been written about the exodus from high cost-of-living metropolises like the Silicon Valley to outposts in such areas as the rural Southwest.
According to figures from the U.S. Postal Service, change of address requests were up 4% with COVID-19’s arrival in the first half of 2020, compared to 2019, while the number relocating temporarily was up 27%.
Geographic pay policies, also referred to as localized compensation, are in flux, too. WorldatWork’s “Geographic Pay Policy Study” found that of the 62% of organizations with existing geographic pay policies, 44% are considering modifying or have recently modified their policies due to the increase of full-time remote work.
And it’s not only current employees joining the long-distance ranks. Forty percent of the 380 businesses participating in WorldatWork’s “COVID-19 Employer Plans and Employee Perceptions” survey reported they are expanding the geographic scope of their talent recruitment as result of COVID-19.
While some elements of the total rewards package, such as compensation, are relatively easy to deliver and adjust to the individual, others, like health care benefits, aren’t so pliable.
As an article by Mercer’s Amber Boehm asks, “Are Decentralized Benefits in Our Future?” In other words, how does the employer deliver the same level of health care benefits to someone who’s moved from San Jose, California (population 1 million-plus) to San Jose, N.M. (population 100-plus)?
There are several factors to consider when developing a long-distance health care benefits delivery strategy, says Marta Turba, WorldatWork’s vice president of content management. They include:
- Obtaining accurate information about where employees live and work — for both compliance and engagement in benefits.
- Adapting current plans/coverage accordingly so you can offer competitive health care benefits regardless of location. Scalability is key, with less dependence on local direct contracting, etc.
- Considering a new model for planning and evaluating the cost of benefits. New plans in new geographies bring a different cost structure. For example, costs in Ohio versus Hawaii are drastically different. The cost containment strategies that some employers have used in the past (negotiations based on HQ location, direct provider contracting, etc.) may be less available or appropriate in this age of remote work.
- Developing better benchmark data for decision making on a national plan level, especially for organizations that were regionally centered in the past.
- Emphasizing delivery flexibility and fairness. How do you equalize offerings across groups? Social determinants sometimes have a disparate impact. Even when employees are covered under the same plan at the same cost, not all employees will derive the same value from the benefit.
Mercer’s Boehm suggests four facets of a health care strategy to consider:
- Medical networks.If a long-distance employee can’t access an in-network provider, that means facing higher out-of-network costs. You may have to run a disruption analysis, including quality indicators, to see if your employees still have adequate access to providers based on the new demographics.
- Specialist access.Specialists generally are centralized around cities. Employees who have “gone Thoreau” may find a one-time 15-minute commute to a specialist may have become one or two hours, which presents several challenges. The prevalence of long-distance employees may require regular review of specialist access.
- Health advocacy.If employees don’t have access to a health advocacy service today, it’s worth exploring, especially with the changes brought on by the pandemic. Providing employees with help in navigating the changing health system is more important than ever to ensure benefits are being efficiently used and lead to good health outcomes.
- Behavioral health.Mental health has been the most common reason to engage telehealth during the pandemic so far. There are already more barriers to mental health care access in rural areas compared to urban areas. It is critical to ensure that long-distance workers have access to quality behavioral health resources and providers.
“Employers have big decisions to make in the coming few months that will affect the future of their workforce,” Boehm concluded. “While there are advantages to both employers and employees in more flexible working, it’s important to analyze, as much as possible, the many impacts that each decision might have.”
About the Author
Jim Fickess writes and edits for WorldatWork.