What impact does the U.S. Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization (the decision overturning Roe v. Wade) have on employer-sponsored group health plans?
This is a huge question with not many concrete answers right now. While it will take a while for things to become clearer, here are some general legal principles to keep in mind:
Employers that offer a fully insured health plan
Will be governed by state law when it comes to abortions performed in the state where they are located.
Currently, some states prohibit or restrict fully insured group health plans from covering abortion services, while others require them to provide such coverage. * If a plan has in-network providers in states where abortion is legal, it may be possible in some circumstances to cover abortion services in those states even if it is illegal in the state where the employer is headquartered.
Fully insured plans may also be able to legally reimburse employees (for the abortion itself or for travel expenses) outside of the health plan. We strongly recommend employers consult an attorney before offering such reimbursements in a state where abortion is illegal.
Employers with a self-insured health plan
Are not subject to state laws and therefore have more flexibility in determining whether and to what degree they cover abortion services. This is because health plans are governed by a federal law known as ERISA, which applies to self-insured health plans and “preempts” (i.e., cancels out) any state law that relates to an employee benefit plan.
While it’s generally assumed that ERISA preempts abortion-related laws, it wouldn’t be surprising to see litigation challenging in the near future. Self-insured employers that wish to restrict abortion coverage in a state that requires it (or offer abortion coverage in a state that prohibits it) should consult their attorney to determine how to proceed.
Keep in mind that this is a greatly simplified discussion of a very complicated issue. As always, we will be keeping an eye on additional developments at the state and federal level, along with any major carrier announcements, and let our clients know about any developments. In the meantime, feel free to contact me to discuss further.
*Note: It is likely that more states will enact legislation prohibiting or requiring coverage for abortion services over the next year or so.
For more information, check out Benefit Advisors Network’s webinar Considerations For Employers Post-Dobbs, July 12th, 1:00 pm CDT.