1. Should the group health plan provide coverage for abortions?
There are no federal laws or regulations that require an employer-sponsored group health plan to provide coverage for elective abortions. The Patient Protection and Affordable Care Act of 2010, as amended (ACA), sets standards that require coverage of “substantial health benefits” for fully insured plans without a grandfather. In addition, the ACA removed annual and lifetime dollar limits for such basic health benefits for all group health plans, including self-insurance plans. At present, optional abortions would not be considered as significant health benefits. Determining which medical costs are and are not “significant health benefits” is done by the US Department of Health and Human Services, an administrative agency of the executive branch, and such guidelines could change the definition to include optional abortion. In this case, the only employer-sponsored group health plans that would be subject to change are those that are not grandparents and are fully insured.
2. Can group health plans still provide coverage for abortions, even in countries where they are banned?
At first glance, it appears that the broad preventive provisions of the Employee Retirement Security Act of 1974, as amended (ERISA), should allow group health plans to continue to provide coverage for abortion, whether elective or necessary, regardless of which state law prohibiting the procedure. ERISA is a federal law that seeks to set uniform standards for laws governing employer-sponsored benefit plans and applies to all employer-sponsored benefit plans, with the exception of those sponsored by non-elected churches and federal, state, and local governments. . ERISA contains a broad language that precedes “any and all state laws” that “apply” to an employee benefit plan, with the exception of the right of states to regulate insurance. Thus, if the health plan of the group of employers provides coverage for abortion, then the plan you should not be affected, although some states where the employer has employees may prohibit abortion procedures.
3. Can group health plans cover travel to a country where abortion is legal?
To the extent that travel costs are eligible under the Internal Revenue Code, then a group health plan (or health reimbursement account) should be able to provide this coverage. Many group health plans provide reimbursement of eligible travel expenses for participants who need to receive medical care outside their geographical home. However, the tax treatment of these benefits depends on whether the amounts are treated as tax-exempt under section 213 of the 1986 Internal Revenue Code, as amended (Code).
Section 213 (d) of the Code excludes from taxable income amounts reimbursed for the costs of medical care of an individual, the spouse of the individual or a dependent under an insurance policy or group health plan. This exception defines “medical care” as amounts paid to diagnose, treat, mitigate, treat or prevent the disease or to affect any structure or function of the body.
Under current applicable law, a group health plan that reimburses or pays directly the “travel expenses” for “medical care” must be exempt from the taxable income of the taxpayer and otherwise deducted by the employer (if self-insured). The fully insured health plan is subject to the terms of the insurance policy, so employers with this type of health plan can provide a self-insured rider or accept a health reimbursement agreement (HRA) to this policy to pay travel expenses for women to have an abortion if abortions are not available in their city of residence.
In general, to qualify as a medical expense:
and Travel costs must be essential for medical care – probably essential if there is no legal abortion in the taxpayer’s geographical area, which is usually 35-50 miles for most IRS purposes; and
ii. Travel costs must be limited to:
a. Transport costs. The Code defines transport costs to include the cost of travel by bus, plane, taxi and / or train, as well as the cost of gas and oil if you drive a car. In addition, if a guardian, carer or medical provider is required to travel with the person to receive medical care, these costs related to the person accompanying the person seeking medical help are also considered eligible costs. The costs of car insurance, car maintenance and / or car repair costs are not eligible medical costs. The current mileage recovery rate is $ 0.18 / mile (for 2022) for medical expenses. However, the taxpayer may use actual costs (gas receipts);
b. Accommodation up to $ 50 / night; and
° C. Nutrition only if provided by a physician.
4. Do employers run the risk of being held liable for violating the state aid and support law, which creates liability for those who help a woman have an abortion?
Obviously, this is an issue that is a major political debate. Our signal aims to advise employers on their legal options regarding their group health plans. These issues will continue to develop in the foreseeable future, and Baker Donelson will provide updates and comments as needed.