Industry Voice: Taking off in a new direction
Adapting international healthcare benefits for a remote workforce is a key talking point, says Lynn Pina, Chief Marketing Officer, GeoBlue
Ding! The elevator doors opened and a crowd of people poured onto the fifth floor of their Manhattan office building. The men all dressed in suits; the women mostly wearing dresses. With briefcases and purses in hand, they head to their respective desks to begin the day – already glancing at the clock to see how much time is left until they can go home.
A few years ago, this description of a 1980s workday would seem archaic because of the fashion or technology. Now, it’s the idea of entering an office entirely that dates this description. That’s because millions of employees around the world have left the nine-to-five in exchange for a more flexible, remote lifestyle. The trend began long before the pandemic forced us to work in isolation. Technology was advancing, communication platforms were popping up left and right, and the next generation of employees stepped into their roles already groomed for a virtual workspace. There is no question that remote workforces are here to stay. However, they don’t look like what you might expect.
Many digital nomads have been working remotely for years, becoming experts at travelling the world without missing a deadline. Thanks to advancements in communication, labouring from an airport, hotel or different country is pretty much the same as being in the office. Most of us picture this digital nomad as a younger person, often self-employed or a freelancer, influencer or creative type. While most digital nomads are young, with 42 per cent of millennials taking on a remote position, the pandemic has given the older workforce an opportunity to explore a ‘location independent’ lifestyle as well. In 2021, 15.5 million American employees described themselves as digital nomads, a 30 per cent increase from 2020. Two-thirds of digital nomads are now mainstream employees, while the remaining are freelancers. The number of ‘location independent’ workers is expected to reach 24 million Americans in the next two to three years.
The growth of this segment of location independent employees stems from a growing trend in mainstream business. Nearly a quarter (24 per cent) of employed Americans say if they had a fully remote job that let them work from anywhere, they’d travel internationally and log in from different locations. That figure increases to 30 per cent for Generation Z and 27 per cent for millennials.
In response to this, at least 28 countries have created digital nomad visa programs. Additionally, 49 per cent of companies are supporting international remote work on a case-by-case basis, and 41 per cent of companies surveyed are considering a ‘work-from-anywhere’ arrangement as a permanent option.
Remote staffing has also blurred the lines between work and leisure travel. Workcations are becoming more popular, with 80 per cent of US travellers planning to add leisure days to future business trips.
Millions of employees around the world have left the nine-to-five in exchange for a more flexible, remote lifestyle
Now that remote work could mean one’s home or a cafe in Paris, employers need to adjust their approach to employee health, safety, security and compliance. They also need to rethink how they classify and segment their employee population, when individuals do not neatly fit into segments such as business travellers or expats. The chart below shows how employers need to approach benefits and risk management when an employee’s home office could be anywhere in the world.
While most HR teams quickly jumped onto the legal and tax compliance risks brought about by employees outside of their home country or jurisdiction, many employers haven’t considered the impact on healthcare benefits. Especially in the US, where most employees obtain healthcare through an employer-sponsored plan, management have a responsibility to ensure that they’ve considered and mitigated the risk of an incident or emergency abroad.
Due to complex US-style health plans that rely on cost shares (co-pays and deductibles) and network access models (different costs based on care provided at contracted network providers), most domestic health plans are not designed to support employees living and/or working abroad. Yet 46 per cent of Americans would expect their domestic health plan to cover the costs of care if they were to need it while travelling abroad.
Employers, therefore, need to consider their role in ensuring their globally mobile employees have the appropriate healthcare access and coverage, whether they are working on-site, from their home office or a vacation rental in Spain.
Some employers may choose to take an active role as a plan sponsor, offering extended international healthcare benefits, while others act as an advisor, educating staff about the potential risks and suggesting additional voluntary benefits that employees purchase on their own.
As a plan sponsor, the employer would show their commitment to remote work by including international travel medical coverage in their employee benefits package. This can be done by covering leisure travel along with an international business trip, or offering a blanket policy that provides employees with coverage for any short-term travel outside their home country.
Even if employers choose not to sponsor health insurance for remote workers outside their home country, they can support the workforce by educating employees about protecting themselves with an individual travel medical policy from an experienced carrier.
GeoBlue has worked with our group employer clients in both capacities. While offering employer-sponsored group international health plans has always been core to our value proposition, we’ve also developed special programmes for clients who preferred to take on an advisor role. Last year, a well-known cosmetics retailer and global hotel brand were rolling out a work-from-anywhere scheme during the summer, wanting to ensure employees had adequate healthcare coverage should they decide to work abroad. As these were temporary and/or pilot schemes, these employers weren’t prepared to commit to offering an international group health plan for all employees. To meet their needs, we developed a programme whereby their employees could purchase our individual travel medical plans at a group discount. In both cases, these employers demonstrated a commitment to ‘work from anywhere’ policies, while still mitigating the risks associated with allowing staff to work abroad.
A new dynamic
Working from home was doubling roughly every 15 years before pandemic, and it’s now gone up threefold in the space of two years. That’s almost 50 years of change compressed into two years. Needless to say, the past few years have brought a revolution in the world of work. As clients and customers navigate the complexities of this new world, it’s important they revisit their approach to employee benefits – including healthcare – ensuring they meet these new market demands and dynamics.