SCOTUS overturns Roe: Understanding the impact on your benefit plans 

The US Supreme Court has ruled that there is no federal constitutional right to abortion. The Dobbs vs. Jackson Women’s Health Organization decision overturns Roe v. Wade (1973) and establishes that abortion now can be regulated by the states at all stages of pregnancy.

Given that about half the states are poised to restrict or ban abortions – and 13 have “trigger” laws, some that go into effect immediately – many employers will find their employees have limited or no access to abortion services in their state. In addition, restrictions on access to medications commonly used in pregnancy termination are likely to increase in those states banning or restricting abortion. If you haven’t already done so, determine what your medical and pharmacy plans cover today. Next, consult with your legal counsel to consider the impact of newly effective state abortion laws and regulations on the covered benefits. Stay apprised of any court decisions regarding ERISA preemption of such laws as they relate to employer-sponsored group health plans. Keep in mind that fully insured plans are subject to the insurance laws and regulations of the state in which the policy is written but ERISA preemption may allow self-funded plans more flexibility.

New focus on travel and lodging benefits

Many employers with plans that cover abortion services are considering options to provide consistent access for their employees across all states and, in that context, are discussing travel and lodging benefits. Employers may already reimburse travel when access to certain types of care within local communities is limited by provider availability, or to encourage employees to seek care at a center of excellence. In anticipation of the Dobb’s decision, employers have extended travel and lodging benefits to abortion and/or other covered medical care that may be hard to access due to state law or policy, while others have expanded it to all covered medical services that are not available within a certain radius of the employee’s home.

How common are these benefits?

In a recent survey of 708 employers on health strategies for 2023, we asked whether they planned to make benefit changes in response to state laws limiting access to abortion services. This survey was launched just before the draft Dobbs decision was leaked in early May. The largest employers (those with 20,000 or more employees) were the most likely to say they already provide, or are planning to provide, a travel and lodging benefit for employees who must travel to receive an abortion – 14%, with another 25% considering it. Fewer than half (46%) were not currently considering adding these benefits, and an additional 11% don’t have employees in states that currently restrict or are likely to restrict access to abortion services. However, among all employers with 500 or more employees, only 3% said they provide this type of support and only 18% were currently considering it (15% don’t have employees in states with restrictions or likely to impose them).

We’ll continue to survey employers to see if these early indicators will change as companies take the time to understand and weigh options.

If you are considering travel and lodging benefits

Start by speaking with your medical carriers and pharmacy benefit managers (PBMs) about travel and lodging benefit options in your group health plan (or integrated with your group health plan) and how you might implement and communicate these policies. Some employers are exploring options that don’t rely upon carrier or TPA capabilities and may offer more flexibility in design and administration. For example, an employee assistance program (EAP), a hardship fund, or a lifestyle spending account might offer reimbursement of travel and lodging expenses for employees regardless of medical plan coverage or enrollment.

Whether implementing a travel and lodging benefit for the first time or modifying an existing benefit to cover abortion services, employers should discuss changes with their legal counsel, including such topics as:

• Coverage and reimbursement limitations under ERISA and the tax code. ERISA permits a group health plan to cover transportation primarily for, and essential to, medical care, and the code considers such transportation to be a reimbursable medical expense, subject to certain requirements and limits. Complications and tax issues can arise when a travel and lodging benefit is offered outside of the medical plan and/or if the coverage is more generous than IRS limits.
• Mental health parity and non-quantitative treatment limits. If the travel benefit is integrated with a group health plan that also provides mental health or substance use disorder (MH/SUD) benefits, compliance issues could arise if the travel benefit is not similarly extended to inaccessible MH/SUD care.
• Privacy protections. HIPAA privacy and security rules apply to benefits offered through the group health plan and may require a business associate agreement if a new vendor is added to administer the benefit. A travel and lodging benefit outside of the group health plan may be subject to other privacy laws depending on the information required to substantiate expenses.
• Current and future legal risks associated with state regulation of abortion. Although a court ruling that establishes ERISA preemption may provide employers with self-funded group health plans more flexibility to cover abortion services that might otherwise be restricted in fully insured plans, some states may take an aggressive approach to enforcing their laws.

Beyond travel and lodging Employers looking for other avenues to support employees seeking safe abortions might want to explore telemedicine, women’s health services, or health care navigation options to determine their capabilities to take patients, prescribe medications or offer navigation and care coordination services. They might also consider communicating and promoting time-off and leave policies for employees who need to travel to access services.

Communicating internally and externally

Employers are thinking carefully about how to respond to this news. Employees, customers and shareholders are paying close attention and most organizations are likely to have stakeholders on both sides of the issue. The way an organization responds and communicates will most likely depend on their own culture and brand. We understand that many employers have been actively engaged in the following activities in preparation for the decision:

• Communications planning. Employers have proactively coordinated with internal stakeholders to create a communications plan that addresses key questions such as whether internal or external communications are warranted, and what the tone and content of these materials will be.
• Leading with empathy. Abortion is a personal and sensitive issue and can be polarizing. Companies are focusing on leading with empathy and providing support for all their people, understanding that views will differ.
• Answering questions. Employers are preparing and training Human Resources professionals, managers (especially front-line managers), call centers, public relations and other internal stakeholders to respond to situations, questions and concerns that employees and customers may have.

How organizations communicate on this subject will vary. Some organizations will issue external communications, some are addressing it in employee communications, while others may choose to respond to questions rather than communicate proactively. Keep in mind that any material modifications to an ERISA group health plan must be communicated to plan participants and COBRA beneficiaries.

Final thoughts

Employers may want to begin thinking ahead to what the Dobbs decision could mean for contraception and broader reproductive health services – birth control, emergency contraception, miscarriages, medication abortion, and infertility treatments – as well as for gender-affirming healthcare. There is Supreme Court precedent establishing a constitutional right to contraception, but its legal foundation is similar to that in Roe and may be vulnerable to the same challenges. The Affordable Care Act’s (ACA) preventive care mandate requires women’s contraceptive coverage in certain non-grandfathered group health plans, but that provision of the ACA is being challenged in federal court. Currently there is no federal law protecting the right to fertility services, which could potentially be impacted by broad state bans on abortion or fetal personhood laws that have been introduced in a number of state legislatures.

For now, we recognize the challenge that many employers will face to respond both quickly and thoughtfully to this significant change.