Employers Should Evaluate Self-Insured Health Plans for Employees in States Banning Abortions After Supreme Court’s Decision in Dobbs v. Jackson Women’s Health Organization
On June 24, 2022, Dobbs v. Jackson Women’s Health Organization, No. 19-1392, 597 U.S. ___ (2022) was decided by the United States Supreme Court upholding the Mississippi law banning abortions after 15 weeks of gestation. The decision was sweeping, overturning Planned Parenthood of Southeastern Pa. v. Casey, 505 U.S. 833 and Roe v. Wade, 410 U.S. 113, to hold that the United States Constitution does not prohibit State legislatures from banning or limiting abortion services.
Self-Insured (ERISA) Health Plans Versus Fully Insured Health Plans
Large employers that offer self-funded health plans are largely unaffected by the Dobbs decision. State law cannot impact these plans because they are governed by Employee Retirement Income Security Act of 1974 (ERISA), which pre-empts states from adopting requirements that “relate to” employer-sponsored health plans. Courts have for decades interpreted that language to bar state laws that dictate what health plans can and cannot cover.
If, however, your health plan is a fully or partially insured group health plan (“Non-ERISA plan”), it is governed by state insurance regulation. Non-ERISA plans offered in pro-life states may soon be prohibited from covering some abortion services as their states pass legislation, or their previously passed “trigger laws” go into effect, to restrict or prohibit abortion after the Dobbs Decision.
Any Medicaid or even marketplace products with federal funding already ban abortion services under the Hyde Amendment unless they are in certain pro-choice states that have decided to use state funds to cover the services. The New York State Medicaid program, for instance, covers abortion services. It lists on its website entities that assist women in other states banning abortion with travel, housing, and other costs.
Healthcare providers in states like New York may be reimbursed by the ERISA plan or potentially by the state Medicaid program if eligible patients are enrolled upon entry into the state. Patients who are not eligible and have non-ERISA health benefits, may need to self-fund the medical services, or look for other resources, including their employers to cover abortion services.
Employers in states that have banned abortion and offer non-ERISA plans may be motivated by their leadership, their Boards, and their employees to assist employees with abortion services. They may begin by considering if they want to adopt a self-funded ERISA Plan so that they have control over the benefits protected from restrictive state laws.
ERISA Plans often already fund medical travel for various services and typically encourage travel to facilities designated as “centers of excellence”. Consequently, expanding covered travel to include travel expenses for medical services related to abortion services should be protected by ERISA from any state law restrictions. If a state sued an employer that sponsored a health plan offering coverage for abortion services out of state on the basis of the state’s restrictions on abortion services, the employer could rely on ERISA’s pre-emption terms as a defense to the law suit. If travel expenses are not part of the employer’s ERISA group health plan, it may offer other types of reimbursement plans like flexible spending accounts (FSAs) that may be used, assuming the IRS permits the expansion of travel for abortion services as a qualified expense, federal reimbursement programs preempt state law.
However, employers that offer non-ERISA plans and seek to fund coverage for their employees to travel out of state for abortion services could not do so under their health plan if their states impose abortion restrictions. Employers located in states that have passed “trigger laws” (restrictive laws that automatically go into effect in the event Roe v. Wade is overturned) and wish to offer coverage for abortion services, should retain competent legal counsel to review their state laws to determine if there is criminal or civil liability for aiding and abetting the evasion of the laws.
Another potential risk that such employers may face is enforcement initiatives seeking to use laws that prohibit crossing state lines for unlawful purposes, such as the Mann Act. The Mann Act from 1910 makes it a felony to engage in interstate commerce by crossing state lines “for the purpose of prostitution or for any other immoral purpose”. Although unlikely that the current administration would use the Mann Act to prohibit funding state travel to circumvent home state prohibitions on abortion services, future administrations may seek to do so.
Also, some states, such as Missouri, are considering the adoption of state laws that would allow private citizens to sue persons who help a Missouri state resident obtain an abortion by assisting in the travel to an out of state physician for that purpose. This could mean a lawsuit against the employer that assists the employee. As stated, ERISA may be a defense if the travel is under the ERISA Plan or related federal reimbursement plans.
Out of State Providers
ERISA Plans typically use large national networks of providers through their third-party administrators making it likely that network providers will be located in states permitting abortion services. Accordingly, if the Plan is restrictive regarding its use of out of network providers, the plan sponsor may want to consider expanding the use of out-of-network providers for certain services such as abortion-related services or defining the out-of-network emergency exception to include use of providers for abortion related services in exigent circumstances.
Most abortions today are provided using medication abortion, which can and has been delivered through telehealth. The procedure involves the use of certain medications after a pregnancy is established. These drugs are different from Plan B, morning after pills, which are used soon after the act of intercourse but before a pregnancy is established.
Certain pro-life states (19 to date) require that these services only be provided in the medical office of a health care provider who is licensed in those states, making it impossible to use telehealth within these 19 states for abortions. It is uncertain if the telemedicine modality is available to individuals living in pro-life states using out-of-state providers in pro-choice states without those health care providers running afoul of many laws and regulations including practicing medicine without a state license. Providers in that situation put their medical license at risk for violating the state law where the patient sought the telemedicine services or could become liable for criminal or civil penalties for violating such state laws. As a result, this method of providing pregnancy termination services could be at risk for individuals located in pro-life states, making travel a better option even if just to obtain the medication abortion. It is possible that the federal government through CMS or the FDA may find a way to provide access to telemedicine for medication abortion or simply find another way to provide these medications.