Home Office Reimbursement benefit plans are fast becoming a hot commodity for any company renegotiating its work-from-home policy.
Uber recently joined the growing list of employers—like Facebook and Google—moving to a long-term work-from-home policy to keep employees safe and healthy during the COVID-19 pandemic.
“As a company built on flexible working, we want to provide our team with flexibility, choice and longer term clarity so they can plan ahead,” Uber said in a statement to Business Insider after it announced its plan to extend work from home through June 2021. Read the full article here.
Part of its new policy includes a Home Office Reimbursement benefit plan that gives employees an extra $500 to spend on things like ergonomic office accessories, a stand-up desk, or noise canceling headphones to mitigate some of the “new normal” home distractions.
Navia worked with Uber to build its Home office Reimbursement plan earlier this year as they began to anticipate the need for an extended stay-at-home policy. Since building the plan with Uber, dozens of companies have inquired with us about Home Office Reimbursement, with new requests coming in every day.
Given the growing demand for this new type of plan, Navia put together this post to give an overview of Home Office Reimbursement plans and help aide in deciding if this plan is right for your company.
Home Office Reimbursement Benefit Plan Overview
In 2018, the Tax Cuts and Jobs Act (TCJA) temporarily eliminated all miscellaneous itemized deductions (scheduled to return in 2026), including the deduction for employee home offices. This means employees working from home during the pandemic can no longer get a tax deduction for those costs. The TCJA has made the need for Home Office Reimbursement plans all the more important as it offers an alternative to help employees cover home office costs.
Navia is seeing employers adopt Home Office Reimbursement plans for two main reasons:
- Help with employee morale in a time of crisis
- Boost productivity by helping employees build safe, healthy workspaces
While most employers have supplied essential equipment such as laptops, keyboards, and monitors during the transition to work-from-home, many employees need additional products and services to make home offices productive and ergonomically safe. Items such as ergonomic chairs, lighting, adjustable height desks, noise cancelling headsets, and faster Wi-Fi can make dramatic improvements in home office productivity and reduce the risk of repetitive motion and other stress-related injuries that are caused by improper working conditions.
Here are just a few of the Home Office Reimbursement items employers can offer with this service:
- Wi-Fi & Wi-Fi Accessories
- Desks & Desk Accessories
- Chairs & Seating Accessories
- Headsets
- Laptop Accessories
Monitors & Monitor Accessories - Computer Accessories
- Office Supplies & Storage
- Home Care/Self-care
(Download “The Top 50 Items to Buy with your Home Office Reimbursement”)
How the Home office Reimbursement Plan works
The plan functions like a wellness plan, and in fact, Navia builds this plan as a wellness benefit. The employer has control over the items it wants to make reimbursable and because there is no pre-tax element to the plan, it can set whatever cap they want to impose on expenses.
Employees submit claims just like they would for an FSA. They must make an adequate account of the item purchased and provide documentation/receipts for the item purchased. Then a timely payment is made to the employee pending approval of the claim.
One way to think about this plan is it’s another form of a reimbursable expense report. But, unlike just cutting a check to employees for expenses, the Home Office Reimbursement plan ensures employees don’t get reimbursed for personal expenses. i.e. the money doesn’t go to pay for Netflix subscriptions or other personal expenses unrelated to the office.
In addition, the plan gives employers a more accurate picture of the cost of home office transitions. It’s one more mechanism to help companies asses the true cost comparison of work-from-home vs an in-office environment.
Example: Sasha is now working from home due to an extended stay-at-home restriction from COVID-19. She had to purchase Wi-Fi for her apartment and silo off a portion of her place as an office. She’s been using a bar stool as a chair and is starting to notice some pain in her wrists and neck from the new office environment. With her company’s $500 home office reimbursement plan, she purchases an ergonomic desk chair and uses the remaining balance to cut her Wi-Fi bill in half for the rest of the year. Sasha is much happier and the pain in her neck and wrist has started to subside.
Deciding on the reimbursement amount
Again, since this is plan does not have a pre-tax element, the company can cap the reimbursement plan at whatever they want. Many of Navia’s clients have taken the approach of calculating the known savings from no longer paying rent for brick and mortar office space and taking a percentage of that savings and allocating it to the Home Office Reimbursement plan.
We have also worked with clients that worked with their IT department to calculate annual costs of ergonomic equipment requests throughout the year and used that as a base for calculating the reimbursement amount.
At the end of the day though, the key is providing employees with the support they need to stay safe, healthy, and productive during these trying times.
Getting started
A good Home Office Reimbursement plan doesn’t have to be complicated and it can go a long way in making your employees feel valued and ensuring their safety and productivity at home. Click here to download Navia’s Wellness/Home Office Datasheet and request more information about getting a plan.
For more information about managing benefits during COVID-19, please check out our COVID-19 Resource page or download our “Ultimate Guide to Managing Benefits During a Pandemic.”
