What consumers need to know about new reproductive health benefits

Following the Supreme Court’s Dobbs decision overturning Roe vs. Wade in June, many employers have stepped up to provide benefits to help employees access abortion and other services in states where restrictions are now in place. Some employers are offering to cover costs for employees to travel out of state to receive abortions, while others are offering paid medical leave and/or revising their health plans to provide insurance coverage for abortion care.

What does this mean for health care consumers? The answer isn’t simple.

While many consumers may feel relief that options for abortion care remain, these benefits do bring potential challenges, particularly regarding patient privacy. According to the Kaiser Family Foundation, for example, claiming travel benefits for abortion may generate a paper trail for law enforcement officials in states where abortion is criminalized. It’s unclear whether the Health Insurance Portability and Accountability Act (HIPAA), which governs health privacy, can withstand potential subpoenas and warrants for patient information in all criminal investigations stemming from abortion care. Adding to the confusion are the myriad of state laws coming into play that limit or ban access to abortion care.

Key factors influencing employer coverage for abortion care

For consumers, much depends on the type of health plan(s) their employer offers and on the applicable law(s) in their state. There are numerous factors that influence employers’ ability to expand access to abortion care. These include whether the employer-sponsored plan is self-funded or fully insured and whether the state law banning or limiting abortion is an insurance law, practitioner law or regulation, and/or a criminal law that also regulates the recipient of an abortion. Another key consideration is how the employer intends to structure the benefit – whether it will be a benefit under the medical plan, a separate tax-exempt reimbursement through a health reimbursement account (HRA) or the employer’s employee assistance program (EAP), if available, or if it will come in the form of taxable travel reimbursement.

Under the Employee Retirement Income Security Act of 1974 (ERISA), group health plans are generally able to cover travel expenses related to medical care. If an employer sponsors a self-insured medical plan, ERISA would preempt any state insurance law that prohibits abortions. In such cases, the employer could add a travel benefit to the group health plan. A number of third-party administrators (TPAs) are currently developing options for employers to add travel benefits to their plan. Employers will most likely have to indemnify the TPA from any liability if the employer or employee faces legal repercussions for traveling out of state to obtain an abortion.

Whether a plan is fully insured or self-funded has big implications for the types of coverage employers may offer. For fully insured plans, it’s unclear whether adding a travel benefit will be viable; viability will depend on how the law in each state is drafted. For example, in states where the abortion ban is an insurance regulation, employers may not be able to cover travel expenses for mandatory excluded coverage. But there may be ways around this. For employers with fully insured plans, for example, it may be possible to fund travel expenses through an HRA or EAP. Or, if the state’s law is drafted to prohibit performing or receiving abortions within its borders, the plan may still be able to cover those expenses incurred out of state. While it seems unlikely, if the abortion prohibition is a criminal law, employers should consult criminal counsel in the state to avoid any adverse results for employees or the company.

Reimbursing travel expenses through HRAs and EAPs

Employers with either self-funded plans or fully insured plans can offer travel as a benefit through their HRA. The HRA would need to be integrated with the medical plan and available only to those who are members of the medical plan. If it isn’t integrated with the medical plan, the HRA would not be an excepted benefit and would need to meet HIPAA portability requirements and the ACA’s market reform and reporting requirements, among other compliance obligations.

To avoid some of the complexities of offering the benefit under a medical plan or HRA, or to make the benefit more widely available to employees who are not enrolled in the employer’s medical plan, employers may also be able offer travel benefits through their EAP to include lodging. Under this option, employees cannot be required to pay a premium or contribute to the cost of the EAP. Providing employees with reimbursement mechanisms through HRAs and EAPs are good options, but employers must pay close attention to state statutes and potential tax implications.

What consumers should know

For consumers residing in states with abortion restrictions, employer-sponsored abortion coverage, including the coverage of travel costs, can help restore access to care. It’s important for consumers to be apprised of the scope and limitations of services that employers may provide in accordance with state law. Ideally, the employer has provided clear, concise communications about coverage details and how to access abortion services. If not, employees should ask their employers for medical plan details, including current benefit offerings, to see what’s already available to them. Employees should also inquire as to whether there are any restrictions or caps on travel expenses when accessing these benefits. Furthermore, employees should know whether their employer-sponsored plan is fully funded or self-insured. Employers with self-insured plans are not subject to state law under ERISA and are able to offer abortion coverage more readily. For organizations that are fully insured, regulations become more complicated, as highlighted above.

Related: Employers offering abortion coverage: Some legal considerations

On a final note, it’s important for employees to remember the breadth of services available to them. The need for abortion services can be a stressful matter, and employer-sponsored wellness and mental health services can provide much-needed resources to guide an employee through this experience.

Sally Prather, Executive Vice President and Practice Leader, Employee Benefits, Alera Group

Danielle Capilla, Vice President of Compliance, Employee Benefits, Alera Group