On June 24, 2022, The U.S. Supreme Court overturned Roe v. Wade, leaving the decision of a women’s right to abortion to individual states. Prior to this decision, health insurance coverage for the procedure was already limited in some states. Abortion coverage has always been highly dependent on where your business operates and what type of plan you had.
With abortion now expected to be prohibited in about half of the U.S. states, the Supreme Court’s decision will make coverage more difficult for many employees to obtain. In this blog, we will break down how the Roe v. Wade decision will affect health plans for businesses.
Abortion Coverage Prior to the Decision
Abortion coverage through healthcare plans was already limited in some states before this landmark decision. States imposed restrictions on the coverage of the procedure in varying degrees. For example, eleven states had already limited the coverage of abortion in all private health insurance plans (Indiana, Idaho, Kansas, Kentucky, Michigan, Missouri, Nebraska, North Dakota, Oklahoma, Texas, and Utah).
Meanwhile, six states (California, Illinois, Maine, New York, Oregon, and Washington) required abortion coverage, with some level of stipulation, on private insurance plans. After the Supreme Court’s decision to overturn the bill, restrictions will greatly differ state by state.
How Will Coverage Change?
Insured Medical Plans
The law of the state from which the policy is issued will dictate the level of coverage for abortion services. Policies issued from states that limit or restrict abortion access will similarly have limited or restricted coverage; policies issued from states that make no change to abortion laws will have no change in coverage offered under the policy. For example, a medical policy issued in California should see no change at all to the level of coverage for abortion services, whereas a medical policy issued in Oklahoma will include little to no coverage for abortion services.
Self-Insured Medical Plans
Self-insured medical plans are exempt from the majority of state insurance mandates, per ERISA. Because self-insured medical plans are not governed by any state’s insurance code, these plans can be designed to cover abortion services to any extent the plan sponsor wishes.
For employers who are self-insured, we recommend speaking with your plan provider to discuss abortion coverage. Of course, if abortions are outright banned in your state, employees will likely have to travel to another state to get the procedure. Many companies are considering to also cover travel expenses for employees seeking an abortion in another state.
Access to Care Issues
The state of residence of a participant will not dictate the level of coverage they have access to. For example, if a California employer maintains a California-issued medical policy that covers an employee residing in Oklahoma, that employee will continue to have the full coverage afforded by the California-issued policy. But given the employee’s residence in Oklahoma, he/she will not have easy access to abortion care or services.
To address the issue of access, employers can implement a medical travel reimbursement plan. The plan can be available for all medical travel or only medical travel related to seeking abortion services. Note, though, that limiting the benefit to travel related to abortion services could potentially raise discrimination issues (though we believe this is unlikely).
To offer reimbursement on a pre-tax basis, the employer will need to set up an HRA through which to run the reimbursement. Unless structured as an Excepted Benefit HRA (with an annual benefit cap of $1800), the HRA can only be offered to those enrolled in the medical plan; ERISA, COBRA, HIPAA, etc., will apply. The benefit can be offered on a taxable basis entirely outside of the employer’s health plan by setting up a company reimbursement policy.
Questions to Consider
Employers should consider the following questions regarding their company’s abortion coverage:
- Is your current health plan coverage likely to be impacted at all? (e.g., is the plan insured? If so, which state issues the policy?)
- Will your employees likely encounter access to care issues based on their state of residence?
- If access to care issues are anticipated for some or all employees, does the employer want to address this via a reimbursement arrangement?
Communicate With Sensitivity
When discussing a sensitive topic like abortion in the workplace, there is the likelihood of employees having strong opinions on the matter. Therefore, you should make an effort to discuss solely the facts and legal issues that go into abortion. It’s important for your employers to understand their coverage to its fullest extent, so preparing ahead of time on how you are going to address the situation is key.
Adjusting to the New Decision With Alltrust
There is no doubt that employers will have to address the Roe v. Wade decision when discussing health care coverage. With the amount of work already on your plate, this can just add to the headache of operating a business. At Alltrust Insurance, we are more than glad to help employers adjust to the new decision.
Our team will work alongside you to ensure that you are well informed and prepared for any change that may affect your healthcare needs. For more information on how Alltrust can help you and your organization, please contact us today to set up an appointment.