Navigating employer benefits in the post Roe v. Wade world 

In the wake of the U.S. Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization, which overturned Roe v. Wade, many employers wondered what, if anything, they needed to do. Almost immediately, we saw news about large companies exploring options to help employees in states with newly triggered abortion bans to travel to places where they could get abortion care. But for small and midsize businesses that don’t have the assets of a large corporation — or the flexibility of a self- funded plan — providing a reproductive health care benefit isn’t always straightforward.  

In today’s work-anywhere world, many employers will have employees in states with and without restrictions. It’s important to understand how state laws and group health plan funding could impact an employer’s ability to offer coverage. Providing some type of travel-related benefit can be an excellent option if employers understand the nuanced compliance and tax implications that come with specific designs.  

If an employer decides that they want to make changes to its reproductive health care offering, they will need to prepare for the ramifications of that change. So the question becomes, how can an employer ensure they target the demographic they want to support without creating a logistical, financial, and compliance nightmare?  

Let’s answer this by examining the most common issues employers are facing when it comes to offering reproductive health benefits and discussing solutions and best practices for maintaining a competitive health benefit offering.  

Operating within an existing group medical plan 

A significant benefit of working through an existing medical or other group health plan is that the compliance and administration structure is already in place. Many plans already include medically necessary travel options, albeit for very specific services like transplants, certain cancers, etc. Talk to your benefits broker, carrier, or administrator about expanding existing travel options. One downside of leveraging your existing plan is that if many employees aren’t on the plan (either because they aren’t eligible or have opted out), the impact will be limited.  

Understanding plan funding is also key. While level-funded or self-funded plans have been gaining traction with small and midsized employers, most still have fully insured medical coverage. That’s important because self-funded plans typically provide more flexibility in the design of their offering and the ability to make changes. They are also generally exempt from state insurance laws (including those restricting abortion coverage) based on ERISA preemption rules.  

Fully insured plans are subject to state insurance law and carrier restrictions, so their plan language regarding abortion restrictions is critical. For example, does the law expressly exclude abortions, regardless of participant location? Or does it simply state that the plan won’t cover anything that is not allowed or is illegal under state law? In the latter, plans covering employees in multiple states may still be able to provide reproductive health care-related services for employees in states without bans or restrictions. Employers should talk with their benefits brokers and carriers to fully understand what is permitted.  

Group health plan options that aren’t traditional medical coverage  

Expanding non-traditional group health plan options like a standard health reimbursement arrangement (HRA), excepted benefit health reimbursement arrangement (EBHRA), health flexible spending account (HFSA), or an employee assistance program (EAP) can be good alternatives to changing the core medical coverage. A traditional HRA or HFSA can only be offered to those individuals who are either enrolled in or at least eligible for the employer’s medical coverage (respectively). HRAs and HFSAs can be paired with insured or self-funded plans and offer a way to provide coverage that the primary plan doesn’t already cover. Both options are still group health plans subject to things like ERISA and, for HRAs, the Affordable Care Act (ACA), but the compliance structure needed to support them is usually in place already or can be added relatively easily. 

An EBHRA can cover things like dental and vision expenses, but also eligible out-of-pocket health care expenses, including reproductive health care-related medical expenses (including travel) not covered under the employer’s major medical plan. Unlike a traditional integrated HRA, individuals need only be eligible for the employer’s major medical coverage, but there is also an annual reimbursement limit ($1,950 for 2023). 

EAPs are often offered to most or all employees, without an additional premium or cost-share for the employee. There is no obligation for the employee to be enrolled in or even eligible for the employer’s medical coverage to enroll. For an EAP to be a viable option for this purpose it must be an “excepted benefit” by ACA standards. That means the EAP cannot provide significant medical care. It also can’t be coordinated with benefits under another group health plan or require employee contribution or cost sharing. This option should be carefully discussed with the EAP vendor and legal counsel to identify a compliant design and to determine if the EAP vendor is willing and able to administer the benefit.    

Don’t forget about taxes 

The IRS does allow certain travel-related expenses to be tax-free if the expense is “primarily for and necessary to” receiving medical care. However, there are both dollar and expense-type limits. For example, in most cases, meals are not reimbursable. These expenses also require substantiation. This can create potential issues related to employee privacy, so employers must be cautious about who administers these. Conversely, offering reimbursement on a taxable basis allows employers to avoid the monetary limits imposed on medically necessary expenses and to have a reimbursement process that could be as simple as submitting a plane ticket or hotel receipt without providing other information.  

Flexible options that aren’t group health plans 

Standalone non-medical travel reimbursement policies or lifestyle spending accounts (LSAs) can provide additional flexibility with fewer compliance concerns because both options are designed to not be group health plans and to be taxable — as a result they are exempt from ERISA, the ACA, and state insurance laws. 

A travel reimbursement policy not tied to medical care provides flexibility while reducing the need to collect medical information that might implicate HIPAA privacy protections. Employers still have flexibility in determining the type of expenses covered, the maximum amount, and eligibility. LSAs are designed to cover a broader subset of expenses and are often packaged as being focused on general health or wellness expenses not covered under a traditional plan. An LSA might cover sports and fitness equipment, nutrition coaching, dance lessons, or a yoga retreat. General travel expense reimbursements that require no more than the employee providing a receipt for a plane ticket can also be included. Employers have a wide degree of latitude in what they want to consider eligible expenses, as long as they aren’t also medical expenses.  

Additional considerations 

There are a variety of reasons that an employee might need to travel for care, including access to specialty services or limited availability of medical clinics in non-urban areas. With the increase in remote work and the closure of many rural clinics, expanding coverage for medically necessary travel can positively impact your employees on the whole. Because travel coverage can benefit a broad range of employees — and you’d risk discrimination claims otherwise — you shouldn’t limit travel benefits only to reproductive health care-related expenses and services.  

The Mental Health Parity and Addiction Equity Act (MHPAEA) requires group health plans that provide medical/surgical benefits to provide mental health and substance use disorder (MH/SUD) benefits on a basis that is at least as favorable as the medical/surgical benefits. This is known as providing parity. Employers offering a travel benefit for reproductive health care also need to assess obligations to offer comparable benefits for travel related to MH/SUD benefits.  

If you are choosing options outside of changes to a core medical plan, consider what resources you have to ensure compliance. If you are using a third party for administration, which is common for options that are subject to ERISA, ACA, etc., you will need to confirm that they are willing and able to administer the benefit, particularly if you are dealing with employees in multiple states.  

Related: Employers offering abortion coverage: Some legal considerations

A general travel benefit or LSA not covered by ERISA cannot rely on any additional protections related to ERISA’s preemption provision for state laws. Even employers whose plans are covered by ERISA preemption should realize that it’s not a magic wand. Some states are considering laws that will create civil liability or make it a crime to assist someone in obtaining an abortion. Employers interested in a deeper discussion on ERISA preemption or those concerned about the legal risks related to offering these benefits should consult legal counsel.  

While this isn’t a straightforward issue, there are options available to employers of all sizes as long as you carefully consider the best fit from a coverage, compliance, and administration perspective. 

Bethany Lopusnak, SHRM-SCP, is the Benefits Advisory Services Manager at Mineral, the HR and compliance provider to 500,000+ growing businesses.