Employers Should Beware of Compliance Issues with Abortion Benefits

The ruling, which effectively reversed Roe v. Wade, means that states are now free to restrict or even end access to abortions.

In response, some employers are offering coverage for employees to travel out of state for abortions. This is a complicated issue, and employers must be aware of the potential compliance and liability issues before moving forward.

The recent Supreme Court ruling on abortion has left many employers scrambling to understand the impact it will have on their ability to provide health coverage for their employees.
When it comes to abortion-related benefits, self-insured employers might have more wiggle room in restrictive states, depending on how courts will view the interaction between the Employee Retirement Income Security Act (ERISA) and state statutes. The advantage is that they can customize what coverage they offer.

On the other hand, non-grandfathered, fully insured small-market plans are obligated to conform to their state’s definition of essential health benefits and provide coverage accordingly. As a result, employers can only offer the coverage carriers are legally permitted to provide, which might not cover abortion-related benefits in some states. Experts recommend providing stand-alone health reimbursement arrangements (HRA) as an alternative.

In many states, abortion has been included on the list of essential health benefits, and others might follow suit. Some might even add abortion-related travel benefits to the list. Self-insured employers could change the coverage they provide to include travel expenses and abortion providers outside of the network.

An option for fully insured employers would be to switch to a self-insured model, but that might not be feasible for businesses with few employees. However, a self-funded plan would give employers more customization options.