Possible changes in the abortion law raise questions about health coverage

On May 2, 2022, a draft opinion from the case of the Supreme Court of the United States Dobbs vs. Jackson Women’s Health had leaked to the press and as a result the court is expected to overturn Rowe vs. Wade and Planned parenting against Casey, leaving in practice the issue of abortion rights to states. Thirteen states currently have laws that will automatically ban at least some forms of abortion in their state if Rowe vs. Wade has been repealed and thirteen or more additional states are expected to follow suit quickly.[1]

Employers across the country are considering the potential impact of the expected decision on their employee benefit plans, and some large national employers have publicly announced their intention to provide travel benefits to cover the costs of employees and other participants in the plan traveling across borders, where necessary for legal abortion. Below are some issues that employers may want to address in relation to the coverage of abortion services in their plans.

Are employers obliged to cover abortions?

No. There is no law requiring employer-sponsored group health plans to cover abortion services, but many are currently doing so. Abortion is not a “substantial health benefit” as defined by the Affordable Care Act, so under current law, even employers who sponsor fully insured plans have a wide margin of discretion to cover it. However, since Dobbs The case was in the spotlight, with some groups of employees, shareholders and other stakeholders urging employers to take a stand on whether their employer-sponsored health plan would provide access to abortion services.

Will group health plans be allowed to cover abortions?

It depends. If Dobbs opinion shifts the regulation of abortion rights and services to the states, fully secured plans will have to comply with applicable state law and may not cover abortion in those places where prohibited by law. Self-insured plans are generally not subject to state insurance laws, but in general are subject to state criminal and other similar laws. In certain circumstances, ERISA precedes national law to the extent that they relate to employee benefit plans.[2] Therefore, if Dobbs opinion shifts the power to ban or regulate state abortion services and rights, as expected, employers wishing to continue to cover abortion costs under their employer-sponsored group health plans must carefully consider the full range of potential consequences and to consult a legal adviser. There are options for employers with fully secured and self-insured plans to support the choice of participants, but employers must take into account all aspects of the assistance and the relevant laws that affect them.

What are the potential legal issues that employers need to consider?

In addition to potential state abortion penal laws (where applicable), employers need to address a number of other issues related to providing coverage for abortion.

Considerations for a group health plan

Most employers intend their group health plans to provide tax-free benefits to employees and other participants. The benefits of a group health plan are exempt from tax only if they are for the medical care of the employee or the federal tax dependent employee within the meaning of section 213 of the Internal Revenue Code. Abortion services do not need to be medically necessary to qualify as medical care for this purpose, but they must be legal (thus, they may need to be medically necessary to be permitted by state criminal law). A trip to access abortion services is medical assistance if the trip is essential for obtaining a legal abortion from a licensed provider. According to the Code, travel allowance can be provided tax-free up to certain limits in dollars and under certain conditions. To the extent that the benefit is provided above the non-taxable limit, the benefit must be conditional on the employee’s income.

If the employer provides travel allowance outside from its group health plan, the employer could inadvertently create another group health plan that would raise a number of compliance issues (market reforms of the Affordable Care Act (ACA), ERISA reporting, COBRA extension rights, confidentiality requirements). HIPAA et al.). As a result, we generally do not recommend that employers offer travel benefits for medical care outside of their group health plans.

Issues of equality of mental health

Employers should also consider whether providing increased travel benefits for abortion services may violate the Equal Mental Health and Equality of Addictions Act by providing more favorable medical / surgical benefits from mental health benefits and disorders, related to the use of substances. We understand that the Ministry of Labor (DOL) has not previously analyzed the benefits of parity travel. In the event that DOL requires parity for travel benefits, employers have several protections available, including the argument that when benefits are needed to address issues under state law, this is not a limitation on poor treatment that violates parity. More guidance from DOL on this is welcome.

FSA Health Savings Account Rules / Considerations

Participants in high-deductible health plans must meet the applicable deductions for the plan before certain benefits are paid from the plan. These include most of the benefits of travel. Sponsors of the plan must ensure that this requirement is met if they offer enhanced travel benefits to cover a trip for abortion or other services. In some cases, this will limit the ability of certain participants to take advantage of travel. Travel expenses can also be reimbursed from a health savings account or a flexible expenditure account subject to tax-exempt ceilings.

Expecting state legal restrictions on abortion

Modifying a group health plan to provide travel benefits to participants to obtain abortions outside the state where abortions are illegal may expose the employer and its employees to potential risk under state law. Offering a broad travel benefit that is not specifically targeted to abortion travel can help mitigate this risk. Of course, extending the benefits of travel outside of abortion services will also increase its potential costs, so employers will need to consider the financial impact of any change.

Another consideration is the coverage of drugs that can terminate a pregnancy – namely mifepristone and misoprostol – which can be prescribed by a telehealth visit and sent by mail. However, there is some question as to whether some state laws may prevent a group health plan offering pharmacy benefits from covering the cost of these drugs, especially if it is mailed to a participant in a country with restrictive abortion laws.

Ultimately, the employer will need to carefully review applicable state laws and consult an attorney to ensure that his or her plan provides the desired benefits and complies with all applicable laws.

Actions to be considered immediately

Depending on the employer’s intention regarding abortion services, the employer may need to act immediately to ensure continued coverage. For example, if an employer-sponsored plan currently provides coverage for abortion services and the employer does not want participants to have a coverage shortfall for any period in any jurisdiction, the employer may need to add travel allowance to its plan. which takes effect immediately in case deer is inverted. Note that the employer may notify such a change before the change is accepted by the plan sponsor (however, the change must be formally accepted by the end of the planning year in order to have retroactive effect in the year the plan is adopted).

Conclusion

The treatment of abortion coverage under employer-sponsored group health plans (especially for multi-state employers) is uncertain at this time and is likely to remain so for some time after the publication of Dobbs opinion. Employers wishing to take action to address changes in the law must continue to be vigilant and remain flexible when state laws, legal challenges and potential legislative and regulatory responses arise.


NOTES BELOW LINE

[1] See 13 states have bans on triggering abortions – here’s what happens when a deer is overturned | Gutmacher Institute

[2] See our article discussing ERISA’s anticipation of certain state laws.

PC Jackson Lewis © 2022National Review of Law, Volume XII, Number 165

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