The shift to remote and hybrid work has permanently changed what employees expect from their benefits packages. Workers who once gathered in an office every day now have vastly different needs depending on where, when, and how they work. A one-size-fits-all benefits package — designed for employees who commute to a central location five days a week — no longer serves a workforce spread across home offices, coffee shops, and satellite locations.
According to a 2024 McKinsey report, 87% of employees offered flexibility take it. For small businesses, this creates both a challenge and an opportunity: the challenge of designing benefits that work equitably for all employees regardless of location, and the opportunity to use inclusive benefits as a recruiting tool in a competitive labor market.
Why Remote and Hybrid Work Changes the Benefits Equation
Traditional benefits packages were built around physical presence. Commuter benefits assumed employees were riding trains. On-site perks like gym access or catered lunches only helped people who showed up. Even health insurance networks were often designed around proximity to a specific office location.
Remote workers face different challenges: home office expenses, isolation, blurred work-life boundaries, and reliance on local healthcare providers who may or may not be in the employer’s health plan network. Hybrid workers face a hybrid set of problems — some days in the office, some days at home, and benefits that may serve neither situation optimally.
Building an inclusive benefits package for a distributed workforce means examining every benefit through the lens of: does this work equally well for someone in the office and someone working from their kitchen table in a different state? The answer will reshape your approach to health coverage, wellness, supplemental benefits, and even communication strategy.
Health Insurance: Network and Telehealth Considerations
For remote employees who live far from the employer’s primary office — sometimes in different states — traditional HMO plans that require in-network providers near a specific location are essentially unusable. A PPO or a national network plan is essential for any team with remote workers spread across multiple geographies.
According to KFF’s 2023 Employer Health Benefits Survey, 49% of covered workers are enrolled in PPO plans, which offer the flexibility remote employees need. When evaluating health carriers, small business owners with distributed teams should specifically ask about national network breadth and out-of-area coverage provisions.
Telehealth has become a cornerstone of remote-friendly health benefits. The COVID-19 pandemic accelerated telehealth adoption dramatically — and employees kept using it. A 2023 McKinsey report found that telehealth utilization has stabilized at 38 times pre-pandemic levels. For remote employees who can’t easily visit an in-network provider locally, having a robust telehealth benefit means the difference between getting care and going without.
When comparing health plans for a distributed team, ask specifically about: what telehealth platform is included, whether mental health services are available via telehealth, and whether there are any geographic restrictions on virtual care access. Some carriers include dedicated telehealth apps like Teladoc or MDLive at no additional cost — a meaningful differentiator.
Mental Health Benefits in a Remote Workforce
Isolation is one of the most frequently cited challenges of remote work. Buffer’s 2023 State of Remote Work report found that 23% of remote workers struggle with loneliness, and 18% cite difficulty unplugging from work as their top challenge. Both of these factors are risk factors for anxiety and depression.
Employers who take mental health seriously build benefits packages that provide meaningful access — not just nominal coverage. That means EAP (Employee Assistance Programs) with real counseling sessions (not just 3 visits), behavioral health parity in the health plan, and telehealth mental health access without burdensome prior authorization requirements.
Some small businesses are also adding mental wellness apps — Calm for Business, Headspace for Work, or Spring Health — as standalone benefits or health plan add-ons. These tools are accessible regardless of where an employee works and provide self-directed mental wellness support outside of traditional therapy. Costs range from $3 to $10 per employee per month and are increasingly seen as table stakes for remote-friendly employers.
Stipends and Reimbursement Programs
One of the most flexible and inclusive benefits you can offer a distributed workforce is a stipend — a fixed monthly dollar amount employees can spend on approved categories. Home office stipends (for equipment, internet, ergonomic furniture), wellness stipends (for gym memberships, fitness classes, or mental health apps), and professional development stipends are all common.
Unlike physical perks tied to an office, stipends work equally well for every employee regardless of location. A remote worker in rural Pennsylvania and an in-office worker in Philadelphia both receive the same $75/month wellness stipend and can spend it on whatever fitness activity suits their situation.
The IRS has specific rules about taxability of employer stipends — some reimbursements are tax-free under an accountable plan, while others are treated as taxable income. A benefits broker can help you structure stipend programs to maximize tax efficiency. For example, employer contributions to an HSA or FSA are pre-tax, while a general wellness stipend paid through payroll is typically taxable unless structured as a reimbursement under an accountable plan.
Voluntary Benefits That Work for Everyone
Voluntary benefits — products employees elect and often pay for through payroll deduction — are inherently remote-friendly because they’re individual-level decisions that don’t depend on geographic location. Accident insurance, critical illness coverage, hospital indemnity, and term life insurance all pay cash benefits directly to the employee, regardless of where they live or work.
These benefits are particularly valuable for remote employees who may feel disconnected from the company’s culture and total compensation story. When an employee receives a cash benefit after a hospitalization and connects that payment back to a benefit their employer helped them access, it creates a tangible experience of being cared for — which is harder to manufacture in a distributed environment.
Pet insurance is another voluntary benefit that resonates strongly with remote workers, many of whom adopted pets during the pandemic and spend more time at home with them. According to the American Pet Products Association, 66% of U.S. households own a pet. Offering pet insurance as a voluntary benefit — at no cost to the employer — shows an understanding of remote workers’ lives that goes beyond the standard benefits checklist.
Commuter Benefits: Navigating a Hybrid Reality
Commuter benefits become more complicated in a hybrid environment. Employees who commute two or three days a week still incur transit and parking costs — just not daily. The IRS allows employers to offer pre-tax commuter benefits of up to $315 per month (2024 limit) for transit and $315 per month for parking, and employees can adjust their monthly election based on actual commuting patterns.
For hybrid teams, the key is flexibility. Employees should be able to adjust their commuter benefit elections month-to-month to reflect variable commuting schedules. Most commuter benefit platforms — WageWorks, Commuter Benefit Solutions, Luum — support this functionality. Make sure employees know they can reduce or pause elections in months when they’re working primarily from home.
Communication and Education: The Hidden Equity Issue
Even perfectly designed benefits can fail remote workers if communication is inequitable. When benefits education happens primarily through in-office all-hands meetings, posters in the break room, or conversations at the water cooler, remote employees miss out. They may not fully understand what’s available to them, how to enroll, or how to file a claim.
Inclusive benefits communication means: virtual open enrollment sessions with recording available on-demand, written summaries sent directly to employee email (not just posted on an intranet), one-on-one availability for benefits questions via video call or phone, and plain-language explanations that don’t assume familiarity with insurance jargon.
Working with a benefits broker who participates in employee education — not just plan design — is a significant advantage for small businesses with distributed teams. Having a named broker employees can call with questions creates accountability and dramatically increases engagement with benefits.
Frequently Asked Questions
Can I offer different benefits to remote versus in-office employees?
Technically you can, but it’s generally inadvisable. Offering materially different benefits based on work location can create legal exposure if the distinction correlates with protected characteristics (e.g., if remote workers skew toward a particular demographic). It also damages morale and the sense of fairness that holds distributed teams together. A better approach is offering benefits flexible enough to serve all employees equally.
What if my remote employees are in different states?
Multi-state employment creates complexity in health insurance (network adequacy), tax withholding, and sometimes benefits compliance. For small employers with remote workers in multiple states, a level-funded plan with a national network or an ACA marketplace option in each state may be more appropriate than a traditional fully-insured small group plan. A broker with multi-state licensing and experience is essential in this situation.
Are home office reimbursements taxable?
Under an accountable plan, employer reimbursements for legitimate business expenses — including home office equipment — are not taxable to the employee and are deductible by the employer. The expense must have a business purpose, employees must submit receipts, and excess amounts must be returned. A flat stipend paid without documentation requirements is generally taxable. Always consult a tax advisor for your specific situation.
How do I make open enrollment inclusive for remote workers?
Host virtual benefits fairs via Zoom or Teams, provide all materials digitally well in advance, offer one-on-one virtual consultations for employees with questions, and use your benefits administration platform’s online enrollment portal (not paper forms). Follow up with employees who haven’t enrolled as the deadline approaches — remote workers are more likely to miss passive communications.
What’s the most impactful low-cost benefit I can add for remote workers?
An EAP (Employee Assistance Program) with meaningful mental health coverage is often cited as the highest-impact, lowest-cost benefit for remote teams. Many EAPs cost $1 to $3 per employee per month and provide counseling, financial wellness resources, legal consultations, and more. The ROI in reduced absenteeism and improved engagement is well-documented.
Build a Benefits Package That Works for Your Whole Team
Designing benefits for a remote or hybrid workforce isn’t just about checking boxes — it’s about creating a total compensation story that resonates with employees regardless of where they work. That takes expertise, creativity, and a broker who understands the nuances of distributed teams.
Garden State Benefits, led by broker Paul Z Olah, helps small businesses across New Jersey and 25 other states design benefits packages that work for their actual workforce — whether that’s 10 in-office employees or a 40-person team spread across the country. From health plan network analysis to voluntary benefits enrollment, Paul handles the details so you can focus on your business.
Call 856-880-6340 or email paul@gardenstatebenefits.com. When you call Garden State Benefits, Paul answers.