Earlier this year, the U.S. Supreme Court ruled in Dobbs v. Jackson Women's Health Organization that abortion and access to abortion is not a constitutional right and reverted back to state laws for determining the legality of the procedure. In other words, only states have the power to regulate abortion and access to it.
This is problematic in today’s work world. Although Michigan does not currently have any issues of access, Michigan employers have employees in a variety of states from California to Texas to Florida to New York. Each state has its own rules and requirements and there is no one policy that can fit all today.
Currently California, Nevada, Oregon, Washington, New Mexico, Colorado, Illinois, Minnesota, Maine, New York, Pennsylvania, Virginia, North Carolina, Vermont, Massachusetts, Connecticut, D.C., New Jersey, Maryland, Delaware, and Rhode Island have maintained the right to an abortion. Michigan has a court stay against the 1931 law and a proposed amendment in the upcoming November election.
Other states such as Texas, Florida, and Missouri have various degrees of legality as to the right and access to abortion. Although employers may be willing to pay for travel and the procedure in a state in which abortion is restricted, including prescriptions by mail; legal liability, civil and criminal, could arise for the employer and the persons that approved the payments for the procedures or medications. It’s a whole new world in the area of states’ rights.
This area of post coital assistance which may be covered by healthcare policies could now be illegal in a variety of states which may pass laws prohibiting types of contraceptives that act after conception, for example the IUD, birth control shots, and the morning-after pill. Others may ban contraceptives entirely. States could also ban vasectomies and other birth control that men could take. Moreover, some states could ban prescriptions from being shipped into the state. Some states have proposed laws that would prohibit shipping abortifacient drugs to employees or impose liability on those who assist with travel arrangements.
Although HIPPA has protections for privacy, these HIPPA protections may be worked around when employers request receipts for travel expenses that they will reimburse for accessing the procedure. Although the medical aspect is protected by HIPPA, the receipts for airlines, hotels, etc. are not. If an employee is in a restricted state, that state could request information about employees who had abortions by requesting these receipts. Privacy would not protect the receipts and now the employee could be identified and subject to prosecution of some sort.
Further, some states may criminally prosecute those employees they find who traveled out of state for an abortion. Texas is considering statutory criminal and civil amendments that prohibit situations in which employers aid or reimburse out of state travel for abortions. Again, these states could prosecute the employee, the employer, and the HR representative for actively supporting or assisting an abortion procedure – even if done out of state. ERISA arguably would not override state laws that only have an indirect impact on ERISA plans or support procedures that would be criminal offenses.
In addition, the use of HSAs to assist with the payment of costs may not be a tax-free event because Section 213(d) of the IRS code generally excludes amounts expended for illegal operations or treatments.
Such potential measures call into question whether employers in such states should implement travel reimbursement policies in connection with out of state abortions at all. Therefore, working with an ERISA counsel, employers considering doing so should review the following:
- Employers may expand their existing group health benefits to include reimbursement for travel required to access certain medical services.
- Unfortunately, this approach mostly works with self-insured employers, who have more flexibility including having control over the types and levels of benefits covered under the plan, so long as it is consistent with existing federal requirements.
- Non-self-insured employers will have to negotiate language with the policy insurance companies.
- Procedures could be paid through Health Reimbursement Accounts or HRA. These reimbursed expenses generally are for employees enrolled in the employer's traditional group medical insurance plan and are reimbursed for qualifying expenses not paid by the traditional plan.
- Unfortunately, this approach may not be available to those not enrolled in the health plan (part-time, interns, etc.) so it is a limited benefit for employees. The HRA could be expanded to all healthcare eligible employees to reduce impact in part.
- Reimbursement costs are limited to $1,800 in 2022, which may be increased for cost-of-living adjustments in future years
- Employers could create standalone travel reimbursement plans, but they could be a taxable event to employees and would not shield employee identities.
HR should contact their attorneys if they wish to implement any benefits for the coming year. It’s too complicated with enough legal issues for it all to be done without competent legal counsel.
Source: Hopkins & Carley 10/13/22, Jackson Lewis 6/24/22