The impact of the Supreme Court’s opinion in Dobbs v. Jackson and subsequent changes will continue for the foreseeable future. One of the major questions employers are asking is how their health plan is impacted by the Dobbs decision.
While this is not an exhaustive list of how health plans may be impacted, what follows looks at some of the significant priorities health plan sponsors should consider.
Is it a fully-insured or self-insured plan?
Whether a plan is fully or self-insured can go a long way in determining what employers can and cannot do after Dobbs. If a plan is fully-insured, whether a plan can cover abortion will likely depend on the law of the state where the policy was issued.
Generally, if a plan is self-insured and subject to ERISA, it is not subject to state insurance laws due to ERISA preemption. This preemption allows plan sponsors more control over plan design. ERISA preemption will likely preempt state laws directed at prohibiting a self-insured plan from covering abortions or providing travel benefits. Since federal law does not prohibit abortion coverage, plan sponsors may be able to choose whether or not to cover abortion under their self-insured plan. However, self-insured plan sponsors should be aware that some states may attempt to attach criminal penalties to abortion. Thus far, ERISA preemption has protected self-insured plans from civil liability. It is unknown whether that preemption will apply to criminal actions. Self-insured plans should discuss and remain in regular contact with their attorneys to determine what course of action is appropriate, should some state laws pass that allow for criminal liability in abortions.
Mental Health Parity and Addiction Equity Act (MHPAEA)
The MHPAEA, one of the most misunderstood and overlooked federal health care laws, prohibits “group health plans and health insurance issuers that provide mental health or substance use disorder benefits from imposing less favorable benefit limitations on those benefits than on medical/surgical benefits”. Put more simply, if your group health plan covers mental health or substance use disorder benefits, those benefits need to be equal to the medical/surgical benefits you offer. Many employers, in response to the draft Dobbs opinion leaked in May, announced that they would expand their travel reimbursement benefits to allow participants seeking an abortion to travel to a state where abortion remains legal. While this change may be acceptable, plan sponsors should design these offerings carefully, so they do not violate MHPAEA. As suggested above, plan sponsors should work with their attorneys and service providers before making any amendments. In 2021, the Department of Labor announced that it would increase its scrutiny of MHPAEA provisions. Plan sponsors could unwittingly create violations for the DOL to find by hastily implementing travel reimbursement changes in response to Dobbs.
What about states that prohibit aiding and abetting of abortion?
Oklahoma and Texas have already passed laws that criminalize the aiding and abetting of an abortion. Other states may follow. Plan sponsors that amend their plans to cover abortion or allow for travel reimbursement for participants seeking an abortion could possibly face criminal and/or civil penalties, even if the employer is not situated in the state where the law was passed. While Dobbs may have attempted to settle some constitutional questions surrounding abortion, it opened the door to a whole new arena of legal challenges on what states may or may not do to police the practice. As always, consult with attorneys prior to making any changes, so they have the opportunity to review the laws of each state you operate in to make sure your plan is compliant, and you don’t accidentally become exposed to criminal or civil penalties.
Interaction with HSAs and FSAs
High deductible health plan participants must meet their deductible before some benefits can be paid by the plan. Typically, this includes travel benefits. Plan sponsors that offer travel benefits for abortion expenses will need to communicate this requirement to their participants. Travel expenses in both HSAs and FSAs may be limited by annual contribution requirements and amounts available in participant accounts.
Can travel reimbursement be offered outside of a health plan?
Whether or not a travel reimbursement can be offered outside of a health plan likely depends on state law. However, employers should be aware that doing so may cause them to accidentally create a group health plan because the travel costs may be considered medical care. Any arrangement outside of a health plan should be fully vetted by the employer’s attorneys.
For employers that choose to move forward with this arrangement, they also need to be aware that HIPAA privacy laws will not apply if the travel reimbursement is offered outside of a group health plan. Therefore, without HIPAA protections, employees may not seek reimbursement when they would otherwise do so.
Many plan sponsors began offering increased telehealth services after the start of the COVID-19 pandemic. In some plans, pregnancy terminating medications can be prescribed during a telehealth visit. At this time, it is unknown whether state laws will impact this practice. It is possible that telehealth plans could be impacted if they mail these medications to participants living in states with strict abortion laws.
Dobbs certainly changed the legal landscape on abortion. The above list is only a quick overview of some compliance issues that employers need to be aware of in light of what their employee benefits package does and does not allow.