Health insurance for remote employees is harder than it sounds, because traditional group plans are built around local provider networks and single-state rules. Once your team is spread across states, a regional plan stops fitting. US employers have five main paths: a national carrier group plan with a PPO network, an ICHRA that reimburses employees tax-free to buy their own ACA plan, a PEO that pools your team for group coverage, a QSEHRA for small businesses, or a taxable health stipend. For a multi-state team, an ICHRA is often the cleanest and can cost less than a single group plan. For employees abroad, you need global health insurance, like SafetyWing, or an employer-of-record arrangement, not a US plan.
Health insurance for remote employees: key facts at a glance
| Item | Detail | Source |
|---|---|---|
| The core problem | Group networks are local; they don’t travel with the employee | Blue Horizon |
| Best multi-state fit | ICHRA: tax-free allowance to buy an individual ACA plan | PeopleKeep |
| ICHRA size limits | Any employer size; no minimum or maximum contribution | PeopleKeep |
| Small business option | QSEHRA, for employers under 50 full-time employees | PeopleKeep |
| Hands-off option | PEO pools your team and handles multi-state compliance | Remote People |
| International teams | Global health insurance (SafetyWing) or an EOR | SafetyWing |
| Typical cost | About $9,300/year single, $26,400/year family (total premium) | KFF via Remote People |
| Pre-existing conditions | ACA plans cannot deny or exclude them; short-term plans can | ACA |
Why traditional group health insurance breaks for remote teams
Health insurance in the US was built around a local employer with a local office. Everyone lived near work, so one regional network covered everyone. Remote work broke that model, and understanding why is the whole key to fixing it.
A standard group plan is tied to a provider network, and networks are regional. When an employee lives in another state, or moves, they cannot take the network with them. An HMO makes this worse, because it only works with doctors in a specific area and requires referrals. On top of that, insurance rules, mandated benefits, and pricing all vary by state. So a plan that fits your headquarters may not even be sold where your remote worker lives. That is why a growing share of employers, serving the 13% of US workers now based at home, have moved to benefits designed to travel.
How employers can provide health insurance to remote employees: 5 options
There is no single right answer, only the right fit for your team’s size and spread. Here are the five paths, and who each one suits.
A national carrier group plan uses a broad PPO network from a large insurer, so it reaches across states better than a local plan. An ICHRA gives each employee a tax-free monthly allowance to buy their own individual plan where they live. A PEO pools your employees under its master policy for group-style rates and handles the multi-state paperwork. A QSEHRA is a small-employer version of the reimbursement model, with IRS contribution caps. And a health stipend is simply extra taxable pay employees can spend on coverage, the simplest option but the least structured.
The rest of this guide walks through the ones that matter most for a distributed team, starting with the standout.
ICHRA: the standout option for multi-state remote teams
If your team is spread across several states, the Individual Coverage Health Reimbursement Arrangement, or ICHRA, is usually the cleanest fit. It flips the traditional model in a way that suits remote work perfectly.
Instead of choosing one group plan for everyone, you give each employee a set tax-free monthly allowance. They use it to buy their own individual ACA plan in their own area, with their own local network. You control the budget; they control the plan. It works for an employer of any size, and it has no minimum or maximum contribution limit, so you set the number that fits your finances. You can even vary the allowance by employee class, including by geography, so you can offer more where coverage costs more. For applicable large employers, a well-designed ICHRA can also satisfy the ACA employer mandate.
Two honest caveats. Employees cannot use both an ICHRA allowance and an ACA premium tax credit. They choose one, based on which helps more. And each employee must actually enroll in a qualifying individual plan to use the benefit. There is a real upside too. Because employees shop their own local market, ICHRAs can run 15% to 30% below the aggregate cost of a single-carrier group plan, according to summaries of ICHRA data. That is why it has become the default recommendation for distributed teams.
PEO and group plans: when pooled coverage makes sense
Not every employer wants employees shopping for their own plans. If you would rather offer one traditional group benefit and hand off the compliance, a PEO is the tool.
A Professional Employer Organization enters a co-employment arrangement with your business. The PEO holds the master insurance policy, and your company adopts it as a participating employer. That pooling gives a 20-person business the kind of group buying power usually reserved for large corporations. The PEO also handles multi-state payroll, taxes, and benefits administration. Providers like Justworks, Rippling, TriNet, and Gusto compete here. On cost, PEO health rates often land 5% to 15% below comparable broker quotes for employers under 50 people. The trade-off is less control over your exact plan and carrier, plus the PEO’s administrative fee. For a small remote team that wants group coverage without becoming benefits experts, it is often worth it.
A plain national group PPO plan, bought directly or through a broker, is the other pooled route. It can work if most of your team clusters in a few states, but it gets expensive and patchy as your map spreads out.
International remote workers and digital nomads
Here is a hard rule that surprises many founders: you generally cannot put an employee who lives abroad on your US group health plan. US plans are built for US networks, and they do not cover routine care overseas. International team members need a different solution.
The main options are global health insurance and an employer of record. Global health plans, from insurers like SafetyWing, Cigna Global, GeoBlue, and Allianz Care, cover people living and working across borders. Care is available in many countries at once. SafetyWing’s Remote Health, for example, covers employees, contractors, and freelancers in 175+ countries on a subscription model with telehealth built in. For actually employing someone abroad, an employer of record, such as Deel, Remote, or Oyster, hires the worker locally on your behalf. It then provides locally compliant benefits, including health coverage. And for individual digital nomads buying their own coverage, SafetyWing’s Nomad Insurance and similar global plans are the common choice.
What health insurance for remote employees costs
Cost depends heavily on which path you choose, but there are useful benchmarks. Employer-sponsored coverage is not cheap in the US, so the number matters.
A typical employer-sponsored plan in 2026 runs around $9,300 per year for single coverage and about $26,400 for family, in total premium, based on KFF’s annual survey. Employees usually contribute 16% to 28% of that. Inside a PEO, employees commonly see single-coverage payroll deductions in the $80 to $220 a month range. Family deductions run $400 to $900, depending on plan tier and employer subsidy. With an ICHRA or a stipend, you set the number, so your cost is whatever monthly allowance you choose, which makes budgeting predictable. That flexibility, more than raw price, is often the reason remote-first employers pick the reimbursement route.
Pre-existing conditions: can a diabetic or someone with thyroid disease get covered?
This question shows up constantly, and the answer is reassuring, with one important catch. It hinges on whether the plan is ACA-compliant.
Under the Affordable Care Act, individual marketplace plans and group health plans cannot deny you, charge you more, or exclude your condition because of a pre-existing health issue. So yes, a diabetic remote employee can get health insurance. Thyroid conditions are covered. And a condition like Parkinson’s is covered, on any ACA-compliant plan. This protection is exactly why an ICHRA works: employees buy real ACA plans that must accept them. The catch is that some cheaper products are not ACA-compliant. Short-term health plans and healthcare sharing ministries can and do exclude pre-existing conditions, and they are not real insurance in the ACA sense. If anyone on your team manages a chronic condition, steer them toward an ACA marketplace plan, not a short-term substitute.
PPO vs. HMO for remote workers
If you do offer or reimburse a traditional plan, the network type matters more for remote workers than for anyone else. The choice comes down to how much the plan travels.
A PPO offers a broader network and some out-of-network coverage, so it suits someone who moves between states or travels for long stretches. An HMO expects you to stay inside a tighter local system and use referrals, which is fine if you live, work, and get all your care in one area, but limiting for a mobile worker. As a rule of thumb, a remote employee who bounces between states is usually better served by a PPO. It is not a universal law, but it is a strong starting point.
The honest read: which option fits your team
If your team is spread across many states, an ICHRA is usually the best fit. It travels perfectly, controls your budget, and lets each employee pick a plan and network that works where they live. It is the option built for exactly this problem.
If you want traditional group coverage without the admin, a PEO makes sense, especially for a small team that wants pooled rates and someone else handling multi-state compliance. If you are a small business under 50 people, a QSEHRA is a simpler, capped version of the reimbursement model. If you just want to help without formal structure, a taxable stipend is the easy path, though it does not satisfy the employer mandate. And if you employ people abroad, use global health insurance or an employer of record, never a US group plan.
There is no single best insurer or plan for every remote team. The right answer depends on your size, your geographic spread, and how much administration you want to own. Match the tool to those three, and the coverage problem gets a lot smaller.
Conclusion
Health insurance for remote employees comes down to one shift: your benefit has to travel when your team does. Traditional group plans are tied to local networks, so distributed teams need a plan built to move, most often an ICHRA that reimburses employees tax-free to buy their own ACA coverage, a PEO that pools the team and handles compliance, or a stipend for the simplest approach. For international workers, global health insurance or an employer of record fills the gap. Match the option to your team’s size and spread, point anyone with a health condition toward a real ACA plan, and you will cover your people well without overpaying.
FAQs
How does health insurance work for remote employees?
Because traditional group plans use local provider networks, employers cover remote workers with benefits that travel: a national PPO group plan, an ICHRA that reimburses employees to buy their own ACA plan, a PEO that pools the team, a small-business QSEHRA, or a taxable stipend. The employee’s coverage follows where they legally live.
How can an employer provide health insurance to remote employees?
The five main ways are a national carrier group PPO plan, an ICHRA (tax-free reimbursement for individual ACA plans), a PEO (pooled group coverage plus compliance help), a QSEHRA (for employers under 50), and a health stipend. For a multi-state team, an ICHRA is often the cleanest and most cost-effective option.
What is the best health insurance for remote workers?
There is no single best; it depends on your team’s size and spread. For multi-state teams, an ICHRA usually fits best because each employee picks a local plan. Small teams wanting group coverage often choose a PEO. For employees abroad, global health insurance like SafetyWing is the right tool.
What is an ICHRA, and why is it good for remote teams?
An ICHRA is an Individual Coverage Health Reimbursement Arrangement. The employer gives each worker a tax-free monthly allowance to buy their own individual ACA plan. It works for any employer size, has no contribution limits, and lets employees choose local coverage, which makes it ideal for teams spread across states.
How do I get health insurance if I work remotely for a company that doesn’t offer it?
Buy an individual plan through the ACA marketplace at HealthCare.gov, where you may qualify for premium tax credits based on income. If your employer offers a stipend or ICHRA, use it toward that plan. Digital nomads working abroad often use global plans like SafetyWing’s Nomad Insurance instead.
Can a diabetic get health insurance?
Yes. Under the Affordable Care Act, ACA-compliant individual and group plans cannot deny coverage, charge more, or exclude care because of diabetes or any other pre-existing condition. The exception is non-ACA products like short-term plans and healthcare sharing ministries, which can exclude pre-existing conditions.
Does health insurance cover thyroid conditions?
Yes, on any ACA-compliant plan. Thyroid disease is a pre-existing condition, and ACA marketplace and group plans cannot deny or exclude it. Diagnosis, medication, and monitoring are typically covered subject to your plan’s normal cost-sharing. Avoid short-term plans if you need reliable coverage for an ongoing condition.
Is Parkinson’s disease covered by health insurance?
Yes, on ACA-compliant plans, which cannot refuse coverage or exclude care for Parkinson’s as a pre-existing condition. Coverage for treatment and medication follows your plan’s normal terms. As with other chronic conditions, choose a full ACA marketplace or group plan rather than a short-term plan that can exclude it.
What is a PEO, and how does it help with remote workers?
A Professional Employer Organization co-employs your staff, holds the master benefits policy, and handles multi-state payroll, taxes, and compliance. Pooling gives small businesses group-style rates, often 5% to 15% below broker quotes for smaller employers. It suits remote teams that want traditional group coverage without managing benefits administration themselves.
How do I insure remote employees who live in another country?
You generally cannot put international employees on a US group plan. Instead, use global health insurance from providers like SafetyWing, Cigna Global, or Allianz Care, or hire through an employer of record such as Deel, Remote, or Oyster, which provides locally compliant benefits. Match the solution to where the employee legally lives.
What is SafetyWing, and is it for remote workers?
SafetyWing offers insurance built for remote and globally distributed people. Its Remote Health plan covers employees, contractors, and freelancers in 175+ countries for teams, while Nomad Insurance is a travel-medical option for individuals. It suits internationally mobile workers whom a standard US health plan cannot cover.
How much does health insurance for remote employees cost?
A typical US employer plan runs about $9,300 a year for single coverage and $26,400 for family in total premium, per KFF, with employees paying part of that. With an ICHRA or stipend, you set the monthly allowance, so your cost is predictable. PEO deductions for employees often run $80 to $220 monthly for single coverage.
What is a QSEHRA, and who can use it?
A Qualified Small Employer HRA lets businesses with fewer than 50 full-time employees reimburse workers tax-free for individual health premiums and medical costs, up to annual IRS caps that update each year. It is a simpler, capped cousin of the ICHRA and works well for small remote teams across multiple states.
What are the big 3 health insurance companies?
By size, the largest US health insurers include UnitedHealth Group, Elevance Health (formerly Anthem), and CVS Health, which owns Aetna, with Cigna and Centene also among the biggest. Size does not equal best for your team, so compare network reach, plan options, and cost for your employees’ actual locations.
Is a health stipend a good way to cover remote employees?
A stipend is the simplest option: extra taxable pay employees can spend on coverage. It is flexible and easy to administer, and it does not interfere with premium tax credits. The downsides are that it is taxable, it is not a formal benefit, and it does not satisfy the ACA employer mandate for larger employers.
About the author
Md Shahinuzzaman is an insurance and out-of-pocket healthcare cost specialist with 16 years of experience in banking and insurance. He writes practical, plain-spoken guides for InsuranceGuidances.com to help employers, remote workers, and families understand their coverage before they need it. He takes no payment from the companies he covers, and every figure in this article traces to a named source.
Reviewed: 2026 ·
Sources
U.S. Department of Labor, health plans and benefits: https://www.dol.gov/general/topic/health-plans
PeopleKeep, health insurance for multi-state remote workers: https://www.peoplekeep.com/blog/how-to-offer-health-insurance-to-multi-state-remote-workers
PeopleKeep, health insurance for employees in multiple states: https://www.peoplekeep.com/blog/health-insurance-for-companies-with-employees-in-multiple-states
Take Command Health, health insurance for remote employees: https://www.takecommandhealth.com/blog/health-insurance-for-remote-employees
SafetyWing, Remote Health for global teams: https://safetywing.com/remote-health
Remote People, PEO insurance cost and how it works 2026: https://remotepeople.com/blog/peo-health-insurance/
HealthCare.gov, coverage for pre-existing conditions: https://www.healthcare.gov/coverage/pre-existing-conditions/
KFF, Employer Health Benefits Survey: https://www.kff.org/health-costs/report/employer-health-benefits-survey/
IRS, Health Reimbursement Arrangements (HRAs): https://www.irs.gov/newsroom/health-reimbursement-arrangements-hras
U.S. Census Bureau, remote work data: https://www.census.gov/
