Health Insurance Perils of Remote Work

We are interrupting our Medicare series today to review an important topic of concern to us, Health Insurance Perils of Remote Work. Please watch the video. The largely effusive articles we see about how the pandemic has changed work forever typically neglect a significant issue affecting worker mobility and that is healthcare coverage.

As we’ve discussed previously, many Plans provide local or regional networks. Yes, the very largest corporations often offer Plans with national networks to their employees who could relocate and safely assume they have access to in-network services. We are concerned, however, that many with local or regional Plans with out-of-network benefits are assuming the out-of-network benefits will serve them well in a remote location and that cannot be assumed. Even the well-care protections of the Affordable Care Act are typically available solely through in-network providers.

Anyone tempted to rely on out-of-network services for all their care should understand their out-of-network deductible and their responsibility for so-called excess charges. Most insurers tie reimbursement of out-of-network claims to a percentage of the Medicare rates for the same service. Unfortunately, the myth that somehow out-of-network charges are related to anything “usual and customary” continues when in fact the litigation against the company setting those rates was settled more than a decade ago. Today, as mentioned above, the insurer typically sets reimbursement at a percentage of Medicare and an out-of-network provider, who by definition does not have a contract with your Plan, can set their charges at will. As a result, the gap between what the provider might charge and the insurer might pay, even at 140% of the Medicare rate for example, can be substantial and these “excess charges” are the individual’s responsibility. Moreover, excess charges are not applied toward the out-of-pocket maximum.

Most people covered by HMOs (health maintenance organizations) do not have coverage outside of the service area so individuals who choose to live in a remote area are typically limited to urgent and emergent care being covered. To make that clear, if someone has a fracture, the care to set the fracture should be covered but the physical therapy services related to restoring function may not. The choice in this situation is often to return to the service area for care.

Remember that the employer does not have decision-making authority in all these matters when the Plan is fully insured. The government, for example, determined that HMOs are generally tied to a geographic area. Employers that self-insure have more latitude to structure healthcare benefit and make healthcare decisions than others but those tend to be extremely large employers with employees in various states.

In summary, please carefully review the healthcare coverage implications of remote work with your employer so that you understand the impact on you and your family. If necessary, please revisit our video on out-of-network benefits, published on February 9, 2021 and the video on “A Dispute with Your Health Plan,” published on April 7, 2021, which provides information on determining whether your Plan is fully or self-insured and, hence, whether it is regulated by the federal government or a state.