Managing health insurance in one state is complicated enough. It’s even more difficult when your company has offices in different states, because every state has its own market and unique regulations for health insurance. This makes it confusing for both employees and employers whenever a worker transfers to an office in another state.
The good news is the Affordable Care Act has set some national standards for group health insurance plans so that there are fewer differences between states. Still, some changes might come up that both you and your employee should prepare for.
Impact for Employees
There are two ways to provide health insurance when your company has branches in different states. First, you can buy a multistate policy, which creates the same health insurance plan for all your employees across the country. Another option is to set up separate health insurance plans in each state.
If you’re using a multistate health insurance plan, your employees shouldn’t see a change when they transfer because they can keep using the same plan. However, if you’re using different plans in different states, your employees should know their coverage will likely change after they transfer. They may end up paying a new premium or see a change in their benefits, such as a higher copayment for some services.
Impact for Employers
Much like your employee, you shouldn’t see a change with a multistate plan. However, the transfer could have an impact if you are using different plans in different states. The transferred employee will change your plan’s demographics in the other state. As a result, when you renegotiate the plan at the end of the year, the insurer could change your premium. For example, if several older employees transfer to your plan in a different state, that plan could become more expensive.
How the Affordable Care Act Simplified the Process
Before the Affordable Care Act passed, there was a much larger difference in the health insurance regulations between states. Some states only allowed expensive, high-coverage plans, while others allowed lower-cost plans with less coverage. As a result, a transfer could result in bigger changes for employees and employers. For example, if an employee moved from a low-cost state to a high-cost state, they likely saw a significant spike in their premiums.
Now, the Affordable Care Act has standardized group health insurance by requiring that all group plans offer a minimum level of coverage. There are still some differences between states, but the gap is not nearly as wide. As a result, you and your employees will see less of a change after a transfer, even if the employee transfers to a new insurance plan.
Moving an employee to another office is always a big decision, but with the Affordable Care Act, at least transferring their health insurance will be easier.
This content is provided solely for informational purposes. It is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers.
David Rodeck is a professional freelance writer based out of Delaware. Before writing full-time, he worked as a health- and life-insurance agent. He specializes in making insurance, investing and financial planning understandable.