When a 120-person distributed tech company realized their engineering and product teams were quietly quitting over health benefits, leadership had to rethink everything. They had assumed the individual marketplace was the only practical option for remote employees across many states. That assumption cost them morale, recruitment momentum, and tens of thousands in turnover. This case study walks through what happened, the choices the company made, how they implemented a new benefits strategy focused on telehealth access, and the measurable outcomes in the first six to nine months.
Why Traditional Group Plans Failed a Remote Workforce
Company profile: Nimbus Apps (pseudonym) — 120 employees, 90% fully remote, team members in 18 states. Annual payroll: $6.5 million. Previous benefits model: a traditional fully insured employer plan, one size fits all, with the employer paying roughly 70% of premiums for a single plan option. Premiums were rising 12% year over year. Average employer cost per employee per month (PEPM) was $1,050. Employee cost-share averaged $420 PEPM. Deductible averages were $3,500 for single coverage and $7,000 for family plans.
Symptoms that drove the crisis:
- Low benefit satisfaction: an internal pulse survey showed 37% satisfaction with health benefits. High out-of-pocket burden: many engineers reported not using their primary care due to high deductibles and co-pays. Poor telehealth availability: the plan’s telehealth vendor had limited behavioral health options and slow appointment times. Turnover spike: voluntary turnover rose from 12% annualized to 18% over the prior 12 months, concentrated in product and front-end teams where candidates had many remote-friendly employers to choose from.
The leadership team initially believed the individual marketplace would be the only viable route for remote hires in disparate states. They had assumed running a multi-state group plan would be administratively impossible and prohibitively expensive. That belief limited early options and delayed action.
Choosing a New Benefits Strategy: HRAs, Telehealth Partners, and Multiple-State Design
After a candid benefits review, the company pursued a hybrid approach that combined an Individual Coverage HRA (ICHRA), a dedicated telehealth partnership, and voluntary ancillary benefits. The rationale was practical: give employees choice, control outlays predictably, and address telehealth as a priority without forcing a single provider network on everyone.
Options considered
- Staying on the fully insured group plan and negotiating price - rejected due to limited network flexibility for remote employees. Switching to a level-funded plan - considered, but underwriting risk and multi-state network adequacy made it unattractive for a widely distributed team. Adopting a private exchange - attractive for options, but opaque cost-sharing and limited control over monthly spend. Implementing an ICHRA - chosen for flexibility and predictable employer budgeting. Partnering directly with a telehealth provider - chosen to guarantee access and faster appointments, including mental health and chronic condition management.
Why ICHRA? It lets employers reimburse employees for individual market premiums and qualified medical expenses on a tax-free basis. For Nimbus, ICHRA offered:
- Geographic flexibility - employees can buy coverage in their state. Predictable employer cost - fixed monthly allowance per class of employee. Choice for employees - buy the plan that suits their needs.
To make ICHRA work for telehealth-oriented staff, the company built a telehealth-first design: a negotiated direct contract with a telehealth vendor at $12 PEPM for primary and behavioral care access, plus a stipend to buy additional coverage or offset premiums.
Rolling Out the New Benefits Program: A 120-Day Implementation Plan
Implementation followed a tight timeline with clear milestones. The plan balanced speed with compliance, communications, and user experience testing.
Day 0-30: Planning and Vendor Selection
Formed a cross-functional team: HR benefits lead, finance controller, legal counsel (for multi-state compliance), and two engineering team reps. https://bitrebels.com/business/why-more-small-businesses-are-exploring-health-insurance-options-off-the-marketplace-exchange/ Collected data: benefit usage, claims trends, employee location list, and satisfaction survey details. Issued RFPs to telehealth vendors and certified ICHRA administrators. Evaluated based on appointment availability, behavioral health capacity, chronic care offerings, and PEPM cost. Selected vendor package: ICHRA administration platform (annual fee $8,500) + telehealth partner at $12 PEPM.Day 31-60: Design and Budgeting
Defined reimbursement levels: $375 PEPM for full-time employees, $200 PEPM for part-time and contractors (different classes required by ICHRA rules). Modeled costs: Employer committed to $375 PEPM for 95 full-time employees who opted in, estimating monthly budget of $35,625 plus telehealth cost of $1,140 PEPM for 95 employees. Legal compliance review for each employee state: ensured notice delivery windows and class definitions met federal rules.Day 61-90: Employee Communications and Onboarding
Launched an education campaign: live Q&A sessions, recorded walkthroughs on how to shop the marketplace, and examples of plans at different premium points. Telehealth pilot: a two-week trial offering unlimited access for all staff to prove appointment speed and clinical quality. Open enrollment window: employees submitted proof of individual coverage to access ICHRA reimbursements. For those who could not find suitable coverage, the company subsidized a short-term solution for 90 days.Day 91-120: Full Deploy and Early Monitoring
First reimbursements processed on day 101. Usage tracking implemented: telehealth utilization, average reimbursement per employee, and enrollment rates. Feedback loop established: weekly surveys for the first month, then monthly check-ins.Quantifying Impact: Turnover, Satisfaction, and Cost Per Employee
Within six months, Nimbus recorded measurable changes. Numbers are rounded for clarity.
Metric Before Change 6 Months After Monthly employer PEPM on health (premiums + admin) $1,050 $870 (ICHRA + telehealth + admin) Employee satisfaction with benefits (internal survey) 37% 78% Voluntary turnover, annualized 18% 9% Telehealth utilization (monthly active rate) 6% (existing vendor) 28% (new vendor) Average employer reimbursements per enrolled employee n/a $340 PEPMKey financial outcome: The company reduced average PEPM employer spend from $1,050 to $870, a net monthly saving of $180 per employee. Across 95 participating employees, that equals $17,100 monthly savings, or roughly $205,200 annually. Administrative fees and telehealth costs consumed about $65,000 of that first-year saving, leaving net savings still above $140,000 year one.
Beyond dollars, the qualitative impact mattered. Employees reported faster access to behavioral health, earlier treatment for chronic issues through virtual coaching, and more meaningful control over their coverage. Recruiters noted benefits as a differentiator in 40% of candidate conversations.
Five Practical Lessons from Rebuilding Benefits for Remote Teams
Lesson 1: Don’t assume the marketplace is the only way. ICHRA and other employer-funded reimbursement models exist for a reason. They let you support employees across states without forcing a single network solution.
Lesson 2: Telehealth is not an add-on. When remote employees lack convenient primary care, telehealth functions as the primary access point. Buying a strong telehealth contract can reduce downstream costs and improve productivity.
Lesson 3: Communication matters more than the plan. The technical details of ICHRA are complex. Clear step-by-step guides and live support during the first enrollment window are worth the cost.
Lesson 4: Define classes carefully. ICHRA rules require class-based offerings. Work with counsel to avoid unintended discrimination and to ensure legal compliance across states.
Lesson 5: Measure early and often. Track utilization, satisfaction, and turnover. If a vendor underperforms on appointment wait times or coverage breadth, switch quickly. The cost of a poor provider is higher than the switching cost in the first year.
A Step-by-Step Checklist to Build Better Benefits for Your Distributed Team
Use this checklist to evaluate whether an ICHRA + telehealth approach could work for your organization.
Map your employee footprint: list states and number of employees per state. Run current cost baseline: total employer spend, PEPM, employee cost-share, deductible averages. Survey employees: prioritize what matters - telehealth, mental health, low deductibles, or premium subsidies. Evaluate vendor options: telehealth, ICHRA administrator, compliance counsel, and payroll integration. Model scenarios: cost-neutral, cost-savings, and enhanced-benefit variants. Include administrative and one-time onboarding fees. Define employee classes for ICHRA and reimbursement levels per class. Create a communication plan: live demos, one-on-one guidance, and FAQs for the marketplace. Run a short pilot with telehealth before full roll-out to validate clinical access and UX. Open enrollment and process first reimbursements within the promised window. Monitor KPIs monthly for the first six months: utilization, satisfaction, enrollment, and turnover.
Quick Self-Assessment: Is Your Company Ready for an ICHRA + Telehealth Model?
Answer these five quick questions. Tally your score: Yes = 2 points, Maybe = 1 point, No = 0 points.
Do you have employees across multiple states who struggle with a single network option? Do employees cite telehealth access or high deductibles as top benefits grievances? Is your HR/finance team capable of managing a new vendor relationship or are you willing to hire an administrator? Would predictable budgeting be more valuable to you than sticking with one traditional insurance premium? Are you prepared to run educational campaigns to help employees shop the individual market?Scoring guide:
- 8-10: Strong candidate for ICHRA + telehealth. Proceed to vendor RFP. 4-7: Worth exploring. Start with a telehealth pilot and employee education to see if interest justifies a full ICHRA. 0-3: Likely better to refine your current group plan or evaluate a private exchange. Consider targeted telehealth as a stopgap.
Final Notes from Experience
Switching benefits for a distributed team is less about finding a single magical product and more about creating predictable employer costs, delivering the services employees actually use, and communicating clearly. Nimbus’s move away from the belief that the marketplace was the only option unlocked real choices. The company traded a one-size-fits-all plan for a combination of tailored reimbursements and strong telehealth coverage, which produced improved morale and reduced turnover at an overall lower net cost.
If you are in HR or leadership at a distributed company, start small: pilot telehealth, run a quick employee survey, and model an ICHRA side-by-side with your current budget. The alternative is continuing to lose talent quietly because benefits feel misaligned with the realities of remote work.