Are you wondering how to get health insurance for employees in multiple states? Health insurance laws for small businesses vary from state to state, but even if it’s not legally required, offering health insurance to your employees is a great perk. 

While you might be interested in health insurance that works in every state, you need to closely examine the details of your health insurance policy to ensure you have the right level of protection for your workers.

Read on to learn more about health insurance for employees in different states to provide your team with the healthcare coverage they deserve.

Health Insurance Options for Multi-State Employees

A small business owner with employees in multiple states has multiple options for offering health insurance:

• health insurance through one national group health plan
• multiple separate state plans
• a health reimbursement arrangement (HRA) account.
• health insurance stipends

Let us take a closer look at the different health insurance options for small businesses with employees in multiple states below.

One national group health plan

One health insurance option you may consider is offering a single national group health plan to all of your employees in multiple states. Selecting one national group health plan provides your small business with the convenience of not having to manage or keep up with the different rules, laws, and regulations that multiple states have regarding health insurance.

• With one national group health plan, each of your employees across multiple states gets the same health insurance coverage no matter where they live.
• Only a small number of health insurance companies have national group health plans, meaning that there is a more limited selection of plans available which may have higher prices.

Multiple separate state plans

Another health insurance option that might work for your small business is offering multiple state plans to your employees who work in different states. Having a separate state plan for each state your workers are located in may allow them to have group health plans that better fit their coverage preferences and medical needs.

One factor to keep in mind is that your selection of health insurance options may vary depending on which health insurance companies offer coverage in each state. For example, consider the Small Business Health Option Program (SHOP) Marketplace, which helps small business owners provide health insurance to their employees. While SHOP plans are widely available in most states, they are not available as an insurance option in every state; some states have their own health care exchanges.

Also, when comparing the small business health insurance plans that are available for your state, you should be sure to look into which medical providers are available within a particular carrier’s network.

HRAs

A small business health reimbursement arrangement (HRA) is a form of health insurance that employers can offer to their employees in multiple states. HRAs allow small businesses to create reimbursement accounts with fixed allowances on behalf of their workers. Employees then purchase their own individual or family health insurance plans and use the employer-provided allowance funds in their HRA accounts to pay for premiums and certain out-of-pocket costs.

An HRA might work for an employer with employees in multiple states since the monthly HRA allowance your business sets is fixed and the same for all your employees, regardless of which state they work in. The other multistate advantages of choosing an HRA for your business health insurance include allowing your employees to choose the level of health care coverage that works for them and a more straightforward way to manage the administrative side of health insurance.

One popular type of HRA that eHealth can help you get started with is an Individual Coverage HRA (ICHRA). These plans are a company-funded health benefit that reimburses employees for healthcare expenses. Unlike a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA), the ICHRA is available for businesses of any size. You can learn more about ICHRA plans or get started setting up an ICHRA for your business with eHealth today.

Health insurance stipends

If you are looking for a way to provide your employees with multi-state insurance, you may want to consider offering a health insurance stipend. Even though it is difficult to find health insurance that works in every state, small and medium businesses can also provide their employees with a monthly or annual stipend.  

Employer health insurance laws by state can vary, and some employees want the opportunity to purchase their own health insurance plan. Although offering your employees multiple healthcare options is beneficial, some may seek something more specific. Instead of purchasing health insurance directly from the company, you may want to provide them with a stipend they can use to buy health insurance on their own terms.

If your employees go out and purchase their own health insurance, they might be able to claim an extra tax deduction.

Tips for Selecting a Multi-State Health Insurance Plan 

Many health insurance plans are either HMO or PPO, which means you are restricted in terms of the providers you can use. On the other hand, if you are looking for health insurance for employees in multiple states, some plans are specifically designed to be used in various locations.

A few essential tips you need to keep in mind when looking for health insurance that will work in multiple states include:

• Geographical location: Always look at the geography of the health insurance plan before you decide if it is right for you. Just because a plan works in multiple states doesn’t mean it will work in the states you need. So, verify you can use the health insurance plan in a different state prior to purchasing. 
• Assess how the coverage varies: If you have a state-based health insurance exchange, you can be confident that the plan will work across the state. If you have a health insurance plan that works in multiple states, you need to assess how the coverage changes from place to place. That way, you know exactly how much coverage you have in each location.
• Assess the premium and deductible: Always take a look at the health insurance premium and deductible. If you need a health insurance plan that works in multiple states, you may have to pay a higher premium or deal with a higher deductible. Make sure you understand what your out-of-pocket expenses are. There are ways to save on small business insurance if you work with a professional.
• Ensure adequate coverage: Make sure the health insurance plan has the right coverage across all areas. It should provide coverage for acute and preventative care without significant out-of-pocket expenses.

Ultimately, the health insurance options you choose for your multi-state employees will depend on the cost and coverage preferences of you and your workforce. Flexibility in selecting policies and the local availability of health insurance companies in each state are also important factors for your small business to consider. Overall, you should know that you have several effective options to choose from when offering health insurance to your employees in different states.

Benefits of Offering Multi-State Employees Health Insurance 

There are several benefits of offering multi-state employees health insurance. They include:

• Expansive recruitment pool: Instead of focusing on recruiting talent in one state, you can widen your recruitment pool to attract top candidates from different locations across the U.S. 
• Tax deductions and credits: By providing employees with health insurance, you may be able to take advantage of tax deductions and credits. This can help reduce your overhead expenses.
• Better employee retention and loyalty: You will have an easier time retaining your employees by offering comprehensive health insurance. If you want your best employees to stick around, provide health insurance.

Health insurance for employees in multiple states: the next steps

Ultimately, the health insurance options you choose for your multi-state employees will depend on the cost and coverage preferences of you and your workforce. Flexibility in choosing policies and the local availability of health insurance companies in each state are also important factors for your small business to consider. Overall, you should know that you have several effective options to choose from when offering health insurance to your employees in different states.

For more information about Health Reimbursement Arrangements for small businesses, speak with an accountant or a legal or tax advisor. To learn more about your small business health insurance options today, check out small business health plans available in your area or speak to one of our licensed health insurance agents. You can also get help setting up an ICHRA plan with eHealth today.

This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.