Multi-State Workforce

A workforce spread across multiple states can make health benefit planning more complex.

Employees in different locations may face different individual-market premiums, carrier options, provider networks, and plan availability. A benefits strategy that works well in one market may create a different experience for employees somewhere else.

Before choosing or updating an ICHRA strategy, consider where your employees are located and how those markets may affect coverage options, affordability, and employee support needs.

Review where your employees are located

Start by understanding how your workforce is distributed.

Employees may be:

• Concentrated in one metropolitan area.

• Spread across several cities within the same state.

• Located in multiple states.

• Working remotely from locations that differ from the employer’s primary office.

• Frequently changing work or residential locations.

As geographic dispersion increases, it becomes more important to evaluate benefits based on the markets where employees actually obtain coverage rather than relying only on conditions near the employer’s primary office.

Compare individual-market conditions by location

Individual health insurance markets can vary substantially by geographic area.

Differences can include:

• Available insurance carriers.

• Plan options and metal levels.

• Provider networks.

• Premium levels.

• Access to local hospitals and physicians.

An employee in one market may have several competitive plan choices, while an employee elsewhere may have fewer available options or substantially different premiums.

Understanding those differences can help an employer evaluate whether its benefit strategy and allowance approach work effectively across the workforce.

Consider employee access to preferred providers

Premium cost is only one part of an employee’s coverage decision.

Employees may also care about whether a plan includes their physicians, hospitals, specialists, prescriptions, or preferred health systems. Those needs can differ significantly across locations and households.

A model that allows employees to select individual coverage can provide greater choice, but employees may still need guidance when comparing plans and provider networks.

For more information about evaluating individual plan options, see Plan Selection.

Review how location can affect affordability

Employee location can also affect ICHRA affordability analysis because applicable individual-market benchmark premiums may vary by geographic area.

Employers evaluating affordability should make sure the employee location information used in the analysis is current and appropriate for the plan year being reviewed.

For more information, see Affordability.

Consider remote and mobile employees

Remote work can add another layer to geographic benefits planning.

An employee may live in one state while the employer is headquartered in another, or may relocate during the plan year.

When location affects eligibility, affordability, available individual coverage, or other aspects of the employer’s plan design, a change in employee location may require additional review.

Employers should have a practical process for identifying material location changes and determining whether they affect the employee’s benefits administration.

Decide whether one strategy works across all locations

A multi-state workforce does not automatically require a different benefit strategy in every state.

The more useful question is whether the employer’s intended approach works reasonably well across the markets where employees are located.

Consider:

• Whether employees have meaningful individual-plan options.

• Whether the employer allowance remains appropriate across different markets.

• Whether affordability results vary materially by location.

• Whether certain employees may require additional enrollment or plan-selection support.

The goal is to identify meaningful geographic differences before they become cost, coverage, or employee-experience problems.

Questions to answer before choosing your approach

Before moving forward, consider:

• Where are your eligible employees actually located?

• How different are the individual insurance markets across those locations?

• Do employees have reasonable access to plans and provider networks that meet their needs?

• Does your allowance strategy work across higher- and lower-cost markets?

• Could geography materially affect affordability results?

• Do remote or relocating employees create additional administrative considerations?

• Will employees in some markets need more enrollment or plan-selection support than others?

Answering these questions can help determine whether your benefits strategy is well suited to a geographically distributed workforce.

Important: This article provides general information about ICHRA and benefits planning and does not constitute legal, tax, or accounting advice.

Consult your legal, tax, benefits, or other qualified professional regarding multi-state workforce and benefits planning requirements applicable to your organization.