With the recent overturning of Roe v. Wade, there has been much confusion about employer considerations for coverage of abortion benefits. States now must make their own decisions about the legality of abortions, and until a more definitive idea of where abortion will be legal, where it will be limited, and where it will be totally restricted, it may be difficult to have a clear understanding about how those related decisions affect employer considerations concerning abortion benefits.
To help clear up as much confusion as possible, let’s dive into state-specific rules concerning abortion insurance, considerations for add-on benefits like travel and lodgings, and finally diving into what federal enforcement of abortion insurance coverage may look like. If you have immediate needs concerning the benefits of your employees, contact our team at Beckham Insurance group for a free quote.
State-Specific Rules on Employer
Considerations for Coverage of
In light of Roe v. Wade being overturned, the individual states have begun to enact a wide range of laws relating to insurance coverage for abortion procedures. Some states, including Texas, Oklahoma, Louisiana, South Dakota, and Kentucky, have outright banned all abortion procedures and thereby disallowed abortion insurance while others require plans to cover this procedure type.
States that Prohibit Coverage
Ten specific states outright prohibit abortion coverage in private insurance plans. Among those are included:
- North Dakota
States Taking Steps to Restrict Coverage
Fifteen additional states are working to restrict abortion coverage for public employees. These states include:
- South Dakota
- South Carolina
- North Carolina
States with Other Restrictions
The remaining states have alternative restrictions in place that may not apply to everyone, but that prevents any federal employee from receiving abortion assistance. These include:
- New Mexico
- New Hampshire
- Rhode Island
- New Jersey
- West Virginia
Employee Benefits Considerations for Travel and Lodgings
With this new ruling, many already-established employee benefits will need to be reexamined moving forward with employers’ abortion-related benefits. One specific benefit that may still qualify for now can be found in travel and lodgings benefits.
As a general rule, insurance relating to travel and lodging benefits should still fall under general medical insurance travel benefits if the trip is primarily for medical care. Any abortions performed by a licensed medical provider would fall under this insurance coverage specification as per Code Section 213(d).
If employers want to provide this specific benefit type, they may need to consider covering these expenses on a taxable basis by providing additional taxable compensation to their qualifying employees, or by doing so on a tax-free basis through the use of either new or existing health plans or EAPs, HRAs, or through other new benefit plans.
Under federal law, providing this kind of travel-related medical coverage should generally be permissible, but any approach taken by employers may come with additional considerations including ERISA compliance and preemption, tax implications, and the potential for employment discrimination concerns.
Because the Biden administration has indicated that it will work to limit the effect of the Dobbs decision in Roe v. Wade’s overturning, there will likely be a lesser expectation of aggressive enforcement from the federal government that may otherwise have been seen. This means that limitations on an employer’s ability to aid their staff in covering or partially covering, abortion expenses should be minimal.
However, because this decision is so new, there is no real certainty when it comes to the aggression of enforcement under state legislature when it comes to abortion coverage. As of now, it is not clear whether those states that currently ban or are seeking to ban abortions will do anything to restrict employers from providing aid in the form of abortion benefits and covering related expenses. Further, it is unclear whether ERISA preemption would prevent states from enforcing limitations on those benefits when they are provided under an ERISA-specific benefit plan.
For the moment, Texas and Oklahoma are the only two states that have statutes in place that explicitly prohibit employer coverage and reimbursement of abortion services within state borders via their benefits plans and insurance offerings. Such an act may be deemed aiding and abetting unlawful abortion if financial assistance is provided by employers to offset abortion costs. As a result, the geographic footprint of any given employer and state law enforcement risks must factor into any decisions being made concerning abortion-related employee benefits.
Get the Help You Need at Beckham Insurance Group
We hope you found this guide to employer considerations for coverage of abortion benefits helpful! Much is still unclear about abortion benefits at this time concerning an employer’s best course of action and as it relates to their specific circumstances, but our team at Beckham Insurance Group is available to assist both you and your clients however is needed in this area. If you are looking for a plan that best suits your employees’ needs, contact us today for a free quote.