The U.S. Supreme Court’s ruling in the Dobbs v. Jackson Women’s Health Organization case has caused a tidal wave of emotion and debate across the nation – especially about health care, and how it can be obtained.
The high court ruled that access to pregnancy-termination/abortive care is not a constitutionally protected right. Instead, it is up to each individual state to decide what limits (if any) to place on abortive care performed within the confines of its borders.
Some states, like Texas, which is the second most-populous state in the country, have made moves to outlaw abortion entirely. California, the most-populous state in the country, and others have made moves to make abortive care more accessible to residents and out-of-state visitors. Some have taken an array of different measures, including imposing abortion limitations based on gestational age (at varying intervals). Others have made no changes at all. With the Dobbs ruling, each state is handling access to abortion differently. That makes facilitating health care especially challenging.
Employer health plans cover nearly half of all Americans. Access to abortion is a health care issue. For this and other reasons, employers are being pulled into discussions about access to abortive care. Additionally, the topic is sensitive and highly divisive. The nature of the topic can have implications on employee relations, employee morale, and other areas.
Many large employers – Apple, Amazon, Citigroup, Disney, Microsoft, Netflix, and others – have made public statements about providing access to abortions to employees who reside in states where they are now limited or banned. This caught the eyes of the media (and the attention of many employees). It has prompted some employers to review abortive care benefits and travel benefits within their health plans – on both sides of the aisle.
Is Abortive Care Included in my Group Health Plan?
Each state has its own policy on whether abortion coverage must be included in benefits plans. The Kaiser Family Foundation has produced an interactive map showing each state’s policies on abortion coverage.
Current California state law requires abortion coverage to be included in all private insurance plans (including employer-sponsored plans), all Affordable Care Act (ACA) Marketplace plans (on Covered California), and in all Medi-Cal plans (Medicaid plans).
Nevada state law neither requires nor limits/restricts abortion coverage in its health plans – except for Medicaid. If covered by Medicaid in Nevada, access to abortion is limited – generally available only to women in extreme medical circumstances.
How Dobbs Affects Health Plans
Many employers are considering adding or removing access to abortive care within their plans. The funding structure and setup of the employer’s group health plan determines what the plan can do. Fully insured plans are limited in their options, while self-funded policies have many options.
Fully insured (traditional) plans are governed primarily by state law, according to where the plan is domiciled (and/or where the covered member resides). Fully insured plans must also comply with federal ERISA law, but state law preempts federal law for such plans. If an employer’s fully insured plan is domiciled in a state that has blocked or restricted access to abortive care, then the health plan is generally subject to such state laws.
Self-funded plans are governed by federal ERISA law, which preempts state regulations. Therefore, self-funded medical benefits are generally not subject to state insurance laws, unlike fully insured plans. Self-funded plans have significant leeway to expand or reduce access to abortive care, regardless of state law – including travel benefits to access medical care in other areas. It is worth noting that self-funded plans are typically best reserved for large employers, usually around 200+ employees, though there are smaller groups that self-fund as well. Consultation with legal counsel is required for compliance.
Travel and lodging benefits have become a new area of interest for employers. Such benefits provide benefits for hotel, travel, etc., when accessing care in an outside area. Travel and lodging benefits can be created and administered in a number of unfolding ways – through a Health Reimbursement Arrangement (HRA), a Health Savings Account (HSA), and an Employee Assistance Program (EAP); by expanding coverage in a self-funded plan; or by providing taxable reimbursement (or bonuses) to employees.
These benefit arrangements are generally considered group health plans, which are subject to federal ERISA law – and may be subject to ACA and other applicable federal law. Each of these plan options has its own considerations and pitfalls. Compliance can be especially challenging with evolving state law and federal regulation, and consultation with legal counsel is required.
Into the Unknown
Satisfying compliance requirements in our post-Dobbs world will be challenging. State and federal laws are changing, especially regarding abortive care. Many laws have been resurrected for the first time in 49 years; other states have created and are developing new laws. We can’t necessarily look back to case law from 49 years ago, in a pre-Roe era, to guide us to compliance today.
The Dobbs decision reverses a prior January 1973 Supreme Court ruling in the Roe v. Wade case (and 1992’s Casey). The Roe case preceded the HMO Act of Dec. 1973, which encouraged the development of Health Maintenance Organizations (HMOs) in America. The case also preceded federal ERISA law, which became effective in 1974. The benefits industry is significantly different in 2022 than it was pre-Roe, in 1973.
We are in entirely new waters – and unfortunately, we have more questions than we have answers at the moment. It will likely be a while before we have concrete clarity, as forthcoming litigation will be critical – and will be ongoing for years.
Sweeping federal regulation may come to get states back in sync, but that is a highly divisive, uphill political battle.
Many health plans have been providing travel benefits to members, to access critical care outside their immediate areas for years. In an analogy, some are comparing abortive care to organ transplant care.
Like an organ transplant service, an abortive service is specialized care that might not be available in a specific area or state. Insurance can (and often does) help cover the cost of care for such travel, in many cases. Employers will certainly want to look at their plans’ health benefits to know if travel benefits are already included. Self-funded employers may have the ability to amend their plans to add, enhance, or reduce such benefits, in consultation with legal counsel.
Employers with group health plans should always create and maintain accurate, compliant federal ERISA documentation for their health plans, as required by the law.
What are Carriers Doing?
Some health insurance carriers (issuers) have released statements to members, employers, and broker about abortive care – others have not. Carriers are swimming in new, murky waters – just like the rest of us. More information is likely to follow from our carrier partners.
Blue Shield of California announced that it will be providing travel reimbursement program to assist its members living in states that implement restrictions/bans on pregnancy termination – for both fully insured and self-funded plans.
UnitedHealthcare has released a Travel and Lodging Benefit FAQ for its plans, and announced that additional information is likely forthcoming.
Word & Brown will be sure to keep you updated on changes related to this issue, with updates as they occur.