The rise of remote and hybrid work has transformed how HR professionals manage employee benefits. With staff now residing across multiple states, sometimes relocating without changing jobs, ensuring equitable access to benefits and maintaining compliance has become more complex. A proactive, location-aware approach is essential for benefits teams navigating this evolving landscape.
- Understand the Geographic Scope of Your Workforce
The first step is to identify where your employees live and work. Even if you operate in one primary location, employees may now work remotely from a different state, either temporarily or permanently. Understanding your workforce’s geographic footprint helps ensure benefits plans and policies align with the regulatory and healthcare realities of each location.
Be sure to regularly update records to reflect employee moves and distinguish between short-term remote arrangements and long-term relocations, which may trigger different compliance requirements.
- Health Plan Network Access
Access to in-network providers can vary significantly by region. Ensure your health plan offers adequate provider coverage in all the states where employees live. National PPO plans may offer broader access than local HMO or EPO options, which may not serve employees who live out of state.
If a national network isn't feasible, consider strengthening your telehealth offerings to ensure employees in remote areas can still receive timely and affordable care. Educate employees on how to find in-network providers in their area and how to utilize virtual care options effectively.
- Compliance with State Mandates
State laws play an increasing role in benefits administration. States may mandate specific coverages, such as infertility treatment, mental health parity, or gender-affirming care, and these mandates may apply based on where the employee lives or works, not just where your company is headquartered.
In addition, several states have implemented their own paid family and medical leave (PFML) or short-term disability programs. For example:
- Massachusetts and Connecticut have state-run PFML programs.
- California offers state disability insurance (SDI) and paid family leave funded through payroll taxes.
Ensure your benefits offerings and payroll deductions align with the requirements of each applicable state. Employees should be informed of any additional state benefits they are entitled to and how to access them.
- Tax and Withholding Considerations
Remote work may also affect payroll and tax reporting. Employees must have state income taxes withheld based on where they physically perform work. Collaborate with payroll to ensure the correct state codes are being used and that your systems track work location accurately.
Keep in mind that benefits-related tax treatment (such as commuter benefits or HSA/FSA contributions) may also vary by state. For example, some states do not follow federal tax rules for HSAs, so contributions may be subject to state income tax.
- COBRA and State Continuation Laws
While COBRA is federally mandated for employers with 20 or more employees, states may have their own continuation coverage requirements. These “mini-COBRA” laws often apply to smaller employers or extend COBRA-like protections beyond the federal 18- or 36-month limits.
Some examples include:
- New York allows up to 36 months of continuation coverage.
- California requires insurers to offer COBRA-like benefits to employers with fewer than 20 employees.
Make sure your HR and benefits teams understand how federal and state continuation laws intersect based on each employee’s location.
- Communication and Benefits Education
Clear, consistent communication is critical in a multistate environment. Employees in different states may have access to different networks, state-mandated benefits, or payroll deductions. Tailor benefits communications to reflect these nuances.
Use virtual tools, such as recorded webinars, targeted email campaigns, and self-service portals, to deliver location-specific guidance. For new hires or employees who relocate, consider providing “benefits welcome packets” that highlight state-specific considerations and plan access tips.
Final Thoughts
Managing benefits for a geographically dispersed workforce requires diligence, adaptability, and awareness of regional variation. By tracking employee locations, verifying network access, and staying up to date with state-level compliance, HR professionals can ensure that remote and multistate employees receive fair and effective benefit support, no matter where they work.
Benefit Allocation Systems (BAS) provides best-in-class, online solutions for: Employee Benefits Enrollment; COBRA; Flexible Spending Accounts (FSAs); Health Reimbursement Accounts (HRAs); Leave of Absence Premium Billing (LOA); Affordable Care Act Record Keeping, Compliance & IRS Reporting (ACA); Group Insurance Premium Billing; Property & Casualty Premium Billing; and Payroll Integration.
MyEnroll360 can Integrate with any insurance carrier for enrollment eligibility management (e.g., Blue Cross, Blue Shield, Aetna, United Health Care, Kaiser, CIGNA and many others), and integrate with any payroll system for enrollment deduction management (e.g., Workday, ADP, Paylocity, PayCor, UKG, and many others).
This article is for informational purposes only and is not intended as legal, tax, or benefits advice. Readers should not rely on this information for taking (or not taking) any action relating to employment, compliance, or benefits. Always consult with a qualified professional before making decisions based on this content.
