On Monday, May 2nd, a potential Supreme Court ruling was leaked showing that the court had voted 5-4 in February to overturn Roe v. Wade. If this ruling stays when it is fully released at the end of June, it means abortion legality would be determined on a state level. Current estimates show that a reversal means abortion would be immediately outlawed in 13 states, with another potential 13 that are likely to do the same. Now, employers and employees alike want to know what this means for abortion as part of healthcare services.
At Newfront, we are working to stay abreast of the situation and have reached out to our carriers for more information. While this can change, below are some frequently asked questions as well as initial insights into how insurance companies and corporations plan to move forward.
What does this mean for corporations?
A Roe v. Wade reversal could become a workplace issue for many organizations. Employees will want to know how this will affect them, which means companies may need to take a stance on abortion and reproductive services. It will be important to have a strategy in place and be prepared to provide answers to employee questions.
Will abortion be covered for residents of all 50 states?
While there is still a lot to be determined, according to a number of our carriers, if an employee travels to a state that allows abortion and they remain in-network, it appears that abortion will be considered a covered procedure. It may also depend on the state in which the plan originates. For example, in California, abortion is a plan mandate, which means employees working for a California-based company would have access to abortion services. However, individual state laws will supersede plan offerings, which means members must access those services in a state where they’re allowed. Newfront can help offer clarity and research plan rules for any group located in a state that is not making abortion illegal.
Will travel-related expenses be covered?
Health plans may cover travel expenses that are primarily for and essential to medical care. However, some health plans may not cover abortion-related travel expenses, or may not cover them sufficiently, so many organizations have already deployed programs outside of their traditional health insurance plans to ensure employees can access to abortion. For example, Amazon is offering to reimburse its U.S. employees up to $4,000 for travel related to non-life-threatening medical treatments, including abortion, that is not available within 100 miles of the employee’s home.
How can employers reimburse abortion-related procedure and travel expenses?
Legal abortion expenses qualify as a §213(d) medical expense. Medical expenses also can include things like transportation costs, lodging (up to $50/day), and meals that are considered essential to and primarily for medical care.
If the employer does not sponsor a self-insured medical plan that can be modified to include abortion-related procedure and travel costs, they can supplement the medical plan coverage with an HRA. HRAs are specifically designed to reimburse employees for §213(d) medical expenses, which can include the amount an employee pays for legal abortion as well as related travel expenses (up to certain limits).
If an employer wants to reimburse transportation, lodging, or meal expenses more broadly than what qualifies as a medical expense, these expenses will have to be reimbursed outside the HRA and will be considered taxable income to the employee.
Unfortunately, employers need to avoid reimbursing §213(d) medical expenses, including abortion and related costs, from a wellness or LSA account. LSAs are not designed to comply with group healthcare regulations (such as ERISA/COBRA/HIPAA/ACA), which makes it impractical to include medical expenses.
Every company is different, and the Newfront team is here to help every client navigate this situation. We will continue to provide updates as things change. Please check back for further information or contact your Newfront advisor if you have any questions.
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