Out of State, but Not out of Mind

Yet improving employee well-being means understanding the permutations of insurance, including the minutiae that encompass moving an organization across state lines.

While the insurance industry is beholden to federal guidelines, state regulatory control may require additional due diligence when developing the ideal plan for all employees. Mid-market firms with operations in one state can protect their workers under a group program and then find further coverage for employees who travel on a regular basis.

For example, a preferred provider organization (PPO) plan with a national network ensures personnel have access to in-network care throughout their travels, notes Dena Allchin, director of large group sales at Word & Brown, a California insurance agency.

“If a company has an HMO (health maintenance organization) product based in California, those benefits are available for emergency services when traveling,” says Allchin. “But you couldn’t go to a primary care physician in Nevada for a wellness check.”

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Companies with large operations in multiple states should be covered under the same policy as their corporate location, Allchin adds. Obstacles arise when a business expands into new territories with a smaller satellite office, as most medical insurance entities don’t offer location carve-outs and will issue only one main policy. Affected companies can work with their insurance plan’s assigned account manager to move their current rate and networks to the satellite location.

Partnering with a broker or agency can help cut through the regulatory thicket presented from state to state—in California, for instance, 51% of employees must live in-state for a provider to issue a California small group policy. (In the Golden State, a small group is defined as fewer than 100 employees.)

“Each medical carrier is going to have individual underwriting requirements by state,” Allchin says. “Do all policies provide the same level of care as a company’s core policy? Some employers will have a plan saying you have to travel 30 miles to go to a primary care physician, where another carrier might have greater access to care. The challenge there is knowing what’s available to you when marketing employee benefits.”

Making a Confident Healthcare Decision

Designing a benefit structure for out-of-state staff should begin with a clear understanding of where your satellite employees live, says Patty Starr, president and CEO of the Health Action Council, a not-for-profit headquartered in Cleveland.

Her organization recently published a report that pointed to community health outcomes as a factor to consider when forming an out-of-state healthcare plan. Knowing location-centric indicators such as life expectancy, preventive service availability and care-match patient goals can translate into improved outcomes for your organization.

Societal determinants—health literacy, addictive behavior, obesity prevalence and others—supply further data for mid-market firms to build an optimal plan. Knowing Houston’s poor health literacy rates compared to those of major metropolitan areas in the Midwest can aid organizations in meeting employee healthcare goals, according to one example cited by the report.

“The more centrally located your employees, the narrower your plan can be,” says Starr. “But if you have employees in a different state, you’ll want to look at what the needs are of that population and find a benefit design and carrier that will support it. You want to have a network of doctors and providers that will serve that region.”

A solid benefit plan is a key component of the complete financial offering in bringing in and keeping talented individuals.

Dena Allchin

Word & Brown

Tapping a national carrier—or a regional carrier that has a relationship with a national company—should result in little interruption or confusion around company-wide health services, says Starr. Alongside differences in population health, employers should study variations in provider billing patterns. Magnetic resonance imaging on a knee, for instance, may differ in billing costs by as much as five times depending on the region.

“Some employers might be hit out of pocket quicker due to those differences,” says Starr. “The amount an employee is responsible for if they’re paying a claim in a self-insured space can vary significantly by location as well.”

Self-insured plans have become increasingly popular, as they give employers greater control of plan design than they have when using a fully insured product, says Greg Hubbell, senior vice president of the Cleveland office of Aon Risk Services. In a self-insured environment, all of a company’s employees typically have the same deductible and copay, no matter where in the country they are located. “Most employers in the middle- market space follow that game plan,” Hubbell says. “Some may be fully insured, and in that case, there could be some subtle differences from state to state, because the insurance company takes the risk and is beholden to state insurance departments.”

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Companies extending their reach across state lines should ask themselves if their current carrier offers a competitive plan within supporting provider networks. With pandemic-prompted talent shortages still affecting the marketplace, mid- market companies can use a strong health program as an employee recruitment and retention tool, says Allchin of Word & Brown.

“A solid benefit plan is a key component of the complete financial offering in bringing in and keeping talented individuals,” she says. “Companies knowing what resources they have available when expanding nationally helps them make a confident (healthcare plan) decision.”