Employers Likely to Revisit Abortion Coverage, Other Benefits, with Roe Overturned

This article was updated from an earlier version.

Now that the U.S. Supreme Court has overturned the Roe v. Wade decision that legalized abortion throughout the U.S., look for some companies to add coverage of travel expenses to obtain medical procedures, including abortions, not available nearby, or to ensure that parental leave and caregiving benefits meet the needs of new mothers who may be single or economically disadvantaged.

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Amazon, one of the biggest private-sector employers in the U.S., will pay up to $4,000 in travel expenses annually for employees to undergo abortions in states where the procedure is legal, joining the list of large U.S. companies that are enhancing abortion-related benefits. 

Also, on May 9, Microsoft said it will expand benefits to cover costs for employees seeking abortions and other procedures in different states.

While some employers are enhancing abortion coverage under their group health plans, others are providing benefits outside the health plan, for instance by:

• Creating a relief fund to pay expenses for employees and dependents who need to travel to another state or making funds available through a health reimbursement arrangement.
  

• Offering a one-time bonus for the travel and procedure costs in a state permitting abortive care.
  

If an employer provides a travel benefit outside of its group health plan, " the employer could unwittingly create another group health plan that would raise numerous compliance issues," including ERISA reporting, HIPAA privacy requirements and COBRA continuation rights, said an alert by attorneys at national law firm Jackson Lewis.

Attorneys at national law firm Ropes and Gray wrote that "some employers have contemplated administering travel reimbursements outside of their health plan and treating such reimbursements as taxable income to the employee." 

They cautioned that "while the seeming simplicity of such an approach may make it appear attractive, it is not without its risks [such as] the need to respect the right of an employee to keep her health care decisions private against requiring proper documentation of the expenses incurred."

Health Plan Considerations

Most health plans don't cover travel expenses, and if they do it's usually to medical centers of excellence that provide high-value services such as cancer care or joint-replacement surgeries.

Employers with self-insured plans could change their coverage allowances during the plan year to allow for travel costs and coverage of non-network abortion providers as long as employee premiums don't change, Roberta Casper Watson, a partner in the Tampa, Fla., office of The Wagner Group law firm, told Bloomberg Law.

Lisa Nelson, vice president of employee benefits, compliance and regulatory affairs at the Leavitt Group, an organization of affiliated independent insurance agencies headquartered in Cedar City, Utah, advised employers to consider the following health plan issues if providing abortion-travel or related benefits under the plan:

• Would an out-of-state abortion covered by a self-funded plan based in a different state be out of network?
  

• How will these services be billed?
  

• Will state taxation apply in the state restricting or banning abortions?
  

"All these questions will need answering," she noted.

Employers that operate in multiple states will also need to navigate a patchwork of different rules affecting abortion coverage, depending on where covered employees and dependents live, work and receive health care.

Self-insured employers may have more leeway to provide abortion assistance in states with restrictive laws, depending on how courts interpret the interplay between the federal Employee Retirement Income Security Act (ERISA) and state statutes.

Tax Issues

Generally, the travel reimbursement will be taxable compensation to employees "except to the extent the reimbursements qualify as medical expenses," wrote Benjamin Gibbons, an attorney in the Boise, Idaho, office of Holland and Hart.

Depending on what travel expenses are covered and how much is being reimbursed, "some expenses may constitute medical care and some may not," Gibbons noted. "If the travel reimbursement is considered to be a medical expense, employers will generally need to integrate the benefit with the company's group health plan to ensure compliance with the Affordable Care Act."

Abortion-Drug Coverage

There also could be more emphasis on coverage of abortion-inducing medications, which may be easier to provide quickly, for instance in states where elective abortion is limited to the first 15 or 20 weeks of pregnancy. Medication abortions represent a growing percentage of all abortions, currently 54 percent, according to research by the Guttmacher Institute.

The most common drugs used to terminate pregnancies in the U.S. are Mifepristone (sold under the brand name Mifeprex) and Misoprostol, used together up to 10 weeks into a pregnancy.

Employers looking to enhance their abortion benefits should "determine if these medications are covered, and if so, if the coverage is under the medical or pharmacy plan," by checking the policies of their insurance carriers and pharmacy benefit managers, wrote Raymond Brown, a partner in Mercer's health benefits practice, and Katharine Marshall, a principal in Mercer's law and policy group.

While prior to COVID-19 Mifepristone could only be dispensed in-person, "now, certified prescribers and certified pharmacies are permitted to dispense the pills to a patient in-person or virtually and the pills can be sent by mail," they noted.

"The bigger context for telehealth services and scope of prescribing by advanced-practice nurses and pharmacists will also get wider attention," predicted Paul Keckley, editor of The Keckley Report, a health care industry newsletter. "Coverage specifications and denial policies in health plans offered by employers and insurers will require compliance with individual state laws [regarding] abortion services, including those offered out of state."

Excluding Coverage

Employers that offer health insurance are not required to pay for coverage of abortion except where the life of the mother would otherwise be endangered.

The Kaiser Family Foundation's 2019 Employer Health Benefits Survey, which included 2,012 randomly selected nongovernment employers, found that "at the worker level, 10 percent of covered workers work at a firm that excludes coverage for abortion under some or all circumstances." This includes:

• 6 percent of covered workers at firms that exclude coverage of abortion except under some limited circumstances (which may include life endangerment, rape, or incest).
  

• 4 percent of covered workers at firms that exclude coverage of abortion under any circumstance

While Sen. Marco Rubio, R-Fla, has introduced a bill that would block companies from writing off the cost of reimbursing employees for abortion travel, the current Congress is unlikely to advance such a measure.

New-Parent Benefits

Coverage of paid parental leave, child caregiving benefits and flexible work schedules could also be a focus for employers if more women, especially those with limited incomes, are giving birth rather than aborting pregnancies. Sen. Todd C. Young, R-Ind., said that if Roe is overturned, the country would "need to be supportive of women who have unplanned pregnancies—through adoptive services, through health care services and other means."

Phillip Levine, a professor of economics at Wellesley College in Wellesley, Mass., wrote at the website EconoFact that "if the patterns that were present in the 1970s when Roe v. Wade legalized abortion at the national level continue to hold, those children [born due to a lack of elective abortion] are more likely to be born to unmarried women, teens, older women and Black women."

However, Levine pointed out that "certainly, the world is a different place today than it was 45 years ago, and this makes it difficult to draw sharp parallels with past experience" in predicting whether there would be a substantial increase in births if Roe v. Wade is overturned. 

He noted, for example, that "long-acting contraception did not exist [prior to the nationwide legalization of abortion] and it is now becoming more popular. Air travel is also much cheaper (after adjusting for inflation) than it was in the era of a regulated airline industry," allowing for greater travel to states without abortion restrictions.

In addition, the 20 states likely to preserve unrestricted abortion access reflect a disproportionate share of the country's population, and "the more states that keep abortion legal, the smaller would be the impact on births."

Reviewing Your Benefits

"Look at your benefits package and make sure that it's providing adequate coverage based on your organization's culture and the beliefs and desires of your employees," advised Emily M. Dickens, the Society for Human Resource Management's chief of staff, head of government affairs and corporate secretary.

She added, "there are numerous things that an employer has to look at when thinking about what the scope of its benefits package is going to be," both in terms of health and reproductive coverage but also child care, dependent care, paid leave and flexible work schedules.

Watch Your Language

"When discussing a sensitive topic like abortion, there is indeed the likelihood someone could get offended or have strong opinions," said Lisa Nelson, vice president of employee benefits, compliance and regulatory affairs at the Leavitt Group. "Try to be matter-of-fact rather than having an opinion."

Related SHRM Articles:

Employers Providing Abortion Benefits Should Address Compliance Questions, SHRM Online, June 2022

Companies Are Announcing Abortion-Travel Benefits Following Dobbs Decision, SHRM Online, June 2022

Employers Prepare Benefits and Policy Responses to Abortion Ruling, SHRM Survey Finds, SHRM Online, June 2022

Be Aware of Legal Risks with Post-Roe Abortion Benefits, SHRM Online, May 2022