Employers Explore Abortion Coverage Continuation
OVERVIEW
While the United States awaits the Supreme Court’s ruling in Dobbs v. Jackson, which may overturn Roe v. Wade and eliminate the federal standard for abortion access, some states are considering setting their own standards that would ban or protect the medical procedure. This state-by-state rulemaking will cause some difficulty for employer plans.
IN DEPTH
Some employers are concerned that their employees may not be able to access abortion services where they live; because of this, employers have taken action to support abortion access for their workers or dependents who live in states that ban these services. In addition to the cost of abortion care, individuals may be faced with travel expenses, which could present a sizeable financial barrier, particularly for lower-wage workers. Accordingly, employers are adding travel costs for medical services if such services are legally prohibited in the jurisdiction where the individual resides. Note this could also cover transgender surgeries or any other services a state may ban in the future.
Apple, Citigroup, Mastercard, Starbucks and Microsoft are among the growing number of large companies that have publicly announced coverage of travel costs for abortions.
Most employers who offer this benefit will do so through their existing employee medical plan. Including this benefit as part of the medical plan might help mitigate worker privacy concerns since health plans are subject to the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Other employers have set up a separate fund outside of their medical plan from which workers may request reimbursement for such expenses. Typically, the employer would administer the latter, creating possible privacy angst for both the employer and the employee.
The first thing an employer considering adding travel reimbursement to their health plan should do is contact their medical plan claims administrator to determine if the claims administrator will administer the travel benefit.
LEGAL CONSIDERATIONS
Most large employers have self-funded health plans, meaning they are not regulated by states and, therefore, state laws restricting abortion coverage in fully insured plans do not apply to these plans. Furthermore, state anti-abortion rules regulate providers who seek abortions within the state. It would be a legal stretch for a state to regulate a citizen who sought health services that are legal in another state. Likewise, an employer who reimburses travel to another state for access to care that is legal in the destination state should also be beyond such prohibition statutes.
That said, shortly after Citigroup made its announcement that they would cover travel costs to obtain an abortion, a Texas state legislator accused the company of violating its state law that bans abortion after six weeks and which includes civil penalties for anyone who “aids or abets” an abortion outside of that timeframe. In the US House of Representatives and Senate, Republican lawmakers are also advocating for financial penalties for companies that cover workers’ travel costs to obtain an abortion.
COST CONSIDERATIONS
Employers trying to extend additional benefits to help workers access abortion care may want to review their health plan coverage, including deductible levels, to make these benefits meaningful to lower-wage workers. Such travel expenses would be considered “disqualifying coverage” if paid prior to an individual satisfying their high-deductible health plan annual deductible—thus making that individual ineligible for contributions to a Health Savings Account.
Employers interested in continuing abortion coverage despite state restrictions should keep abreast of any federal and state developments, including any potential new guidance or legislation that may emerge.
