Aon is warning that organisations must be aware of the workplace benefits implications of employees choosing to work away from their home nation as remote working grows.
The firm emphasised that group risk and healthcare benefits could be particularly tricky to navigate along with pensions and tax issues.
The caution echoes those of the Health & Protection roundtable panel who also noted this was becoming a sticky area for employers and insurers.
They urged employers to decide quickly and act evenly on how they would treat staff choosing to move and work abroad.
This included issues of providing healthcare benefits and the problems for people currently receiving treatment or unable to get pre-existing conditions covered under new plans.
Aon noted that embracing the agile remote working environment gave employers flexibility and could support an employer value proposition along with employee engagement and retention.
But the consultant warned it may also have ramifications on policies and benefits provisions that employers need to consider.
For medical benefits, providers often do not cover treatment received outside of the home nation, the firm warned.
“Employers with colleagues abroad may therefore need to consider international-based coverage – which can be expensive,” it said.
“But, if medical benefits are offered as a contractual right, then there could be an expectation that the employer will still offer this benefit at an appropriate level while overseas.”
And it added that from a group risk insurance perspective, employees based outside the country, even temporarily, could affect the perceived risk of the scheme.
“Additionally, if locations of employees are not declared, then the provision of cover could also be impacted,” it said.
Tax and pensions provision
Concerns around tax and pensions were also raised as the exact impact depended on many aspects including the benefits, the provider, where the employee will be based, whether the relocation is temporary or permanent, and potentially local legislation in relation to tax and residency.
Catherine Stait, Risk Technical Lead at Aon in the UK, highlighted that the first action for any employer was to ensure they had a clear understanding of the intended location of all employees who work abroad to ensure that they have the relevant information that a benefit provider may require.
“Once this information is obtained, employers can talk to their professional advisers and benefit providers to understand the impact for each benefit offered, enabling clarity and confidence to make better decision,” she said.
“Additionally, it’s paramount to ensure employees understand the impact of being based overseas on their benefits packages.
“This communication not only protects individuals but also helps clarify why an employer may place some restrictions on the scope of a remote working policy.”
