The Roe v. Wade reversal has topped the headlines in recent days. While it is easy to get swept up in the emotion of it, employers will want to determine its impacts on benefits and prepare a response.
In 1973, the U.S. Supreme Court ruled in Roe v. Wade that the Constitution of the United States protects a pregnant woman’s right to have an abortion. Nearly 50 years later, the court voted 6-3 to uphold Mississippi’s ban on abortion after 15 weeks of pregnancy and voted 5-4 to explicitly overturn Roe v. Wade. The decision to overturn Roe v. Wade ends the Federal Protection of abortion rights and allows States to decide whether to restrict or ban abortion.
For benefits professionals, it is important to understand what it means, what it doesn’t, and ultimately what (if any actions) you may need to consider.
1. Rules vary by state
As a result of the decision to overturn Roe v. Wade, states have the ability to decide whether to restrict, ban or protect rights to abortion. About one-third of states have laws (or are expected to have laws) which actively protect the rights to abortion.
Meanwhile, there are already seven states (Arkansas, Kentucky, Louisiana, Missouri, Oklahoma, South Dakota, and Utah) that have eliminated – or nearly eliminated – access to abortion. Numerous other states are expected to follow suit. The remaining states are likely to fall somewhere on a spectrum between the two.
When looking at the rules for a state, it is important to understand a few things. First, are there restrictions on when abortions can occur? Some states may restrict abortion after a set time period in the pregnancy (i.e., after 15 weeks) and/or based on certain exceptions. Next, are there waiting periods or counseling requirements? These may require an individual to make multiple visits and review information prior to a procedure. Additionally, for minors, is parental consent or notification required? Finally, are there coverage restrictions? Some state exchanges and State Medicaid programs already limit or do not offer coverage for abortion.
Understanding state requirements is not always easy. You may need to check with your state laws and insurance commissioners. Here is a state-by-state resource that may aid in your investigation.
2. Eligibility not impacted
Abortion is an eligible medical expense under the Internal Revenue Service Code, which makes it either tax-deductible or reimbursable under a Flexible Spending Account (FSA), Health Savings Account (HSA) and Health Reimbursement Account (HRA), if permitted by the plan. The reversal of Roe v. Wade doesn’t affect the eligibility for abortion.
Further, a change to eligibility would require a separate Federal legislative action from Congress to remove its eligibility. At this time, there is no legislation expected to remove the Federal eligibility of abortion. As states implement new laws, it is possible states could restrict or limit the state tax treatment for these expenses.
3. Travel expenses may be eligible
For individuals who may need to travel for a procedure, medical expenses may include the cost of transportation, meals and lodging if the principal reason for being there is to receive medical care.
Employers may want to assist employees in covering travel-related expenses. There are a few alternatives that can be used. An HRA may be used to provide employer funding on a tax-advantaged basis. If the funds are being offered in conjunction with the group health plan coverage, an integrated HRA can be used.
The advantage of an integrated HRA is that employers can set the funding limits. The drawback is that it can only be offered to those with group health coverage. If the employer funds are being offered as a separate benefit, you may be able to offer an Excepted Benefit HRA. An Excepted Benefit HRA can be offered to all employees (regardless of health plan coverage) up to $1,800 annually. If these options are not feasible or if employers are looking to offer additional benefits, employers can also consider offering a taxable benefit, such as a Specialty Account.
4. Networks and coverage could be impacted
Health plan coverage is expected to be impacted as states begin to enforce laws or requirements which restrict access to abortion. If you have a narrow network or state-only coverage, your health plan coverage is likely to mirror the rules and laws of the state.
For some employers, this means that abortion will not be a covered service in their health plan. Employers that want to ensure abortion is a covered service may need to consider adding access to a wider or national coverage network. Alternatively, employers could choose to reimburse employees for out-of-network expenses through HRA options.
5. Evaluate other benefits changes
In states where abortion services are banned or limited, employers may need to consider how this affects employees, their use of other benefits programs and other longer-term implications.
- Child-care or new parenting benefits: Employers may want to consider the benefits they are offering in regard to childcare benefits. This can be realized through a number of ways which may include on-site childcare, dependent care FSAs, childcare finding services and access to new parent classes.
- Counseling services: Employees may have a variety of counseling or consultation needs which have direct or indirect impacts. This may include consultation options, mental health services, new parenting counseling and adoption consultation services.
- Financial planning services: The decision to have and raise children can have a significant impact on an employee’s financial plan. Financial planning services can help employees understand what is ahead and how to best prepare.
Timing and communication are important
This is a sensitive issue with a variety of opinions. Regardless of the benefits decisions you make, it is important to provide clear and timely communication to employees. The future is uncertain, but communicating with employees now will help ensure a smooth transition if changes are made. Individuals need to have a clear understanding of the options their benefits may or may not support so they can make informed decisions