Group health plan sponsors should work with insurers and legal counsel to review their health plan and prescription coverage provisions, transportation reimbursement benefits, prenatal and neonatal expenses, mental health and employee assistance programs and associated participant communications. ERISA group health plan sponsors will likely watch litigation unfold that challenges the authority of state abortion laws as applied to federally regulated ERISA plans.

Employers and plan sponsors may also consider whether to implement changes outside the group health plan context — for example, revisiting dependent care and education savings benefits, caregiver support, paid time off and parental leave policies and workforce diversity, equity and inclusion initiatives, as well as the longer-term impact of this decision on their employees’ financial security and retirement readiness.

Background

Dobbs v. Jackson Women’s Health Organization (Dobbs) concerns the constitutionality of a Mississippi state law that bans abortions after the 15^th week of pregnancy, except in cases of medical emergencies or fetal abnormalities. A Mississippi women’s health clinic sued the State of Mississippi in federal court to challenge this law as an unconstitutional ban on abortions. The trial court agreed that the Mississippi law is unconstitutional and invalidated the law, and the Fifth Circuit Court of Appeals affirmed this decision. The State of Mississippi appealed the Fifth Circuit’s decision, challenging the underlying constitutionality of the 49-year-old Roe v. Wade decisions and related Supreme Court cases that prohibit states from banning or unduly restricting abortions. Oral arguments were held on December 1, 2021.

On May 2, 2022, the news organization Politico published a leaked Supreme Court draft opinion of Dobbs that declared the Roe decision “egregiously wrong from the start” and would explicitly overrule Roe’s federal constitutional protection of abortion rights — meaning that states could ban or restrict abortion services. Although the draft was verified as accurate, at the time it was unclear whether, or to what extent, the text in the final Dobbs ruling would resemble the text of the draft opinion.

In its official 6-3 decision released on June 24, 2022, the Court majority held that the authority to regulate abortion belongs to the states and not the federal government. The Court majority found that obtaining an abortion is not a fundamental constitutional right because such a right has no basis in the Constitution’s text or in our nation’s history. Consequently, state laws regulating abortion, including the Mississippi law, are constitutional.

Implications vary by jurisdiction

The implications for abortion services will vary and, to some degree, depend on how state legislatures react to the decision. Thirteen states have so-called “trigger laws” that would ban abortion immediately or very quickly if the Supreme Court invalidates Roe; five states had abortion bans pre-Roe that could again be enforced; and 14 states could restrict abortions before 22 weeks of pregnancy or earlier.

Additionally, a Texas law — which the Supreme Court declined to invalidate in its 2021 Whole Women’s Health v. Jackson decision — provides a civil right of action for private citizens to sue providers and individuals who “aid and abet” abortions. It is anticipated that other states may adopt a similar law. Many organizations are also closely watching state criminal laws prohibiting individuals from receiving, or assisting others to receive, abortions in a state where it is lawful. This risk may apply to employers and/or plan sponsors who are charged with aiding and abetting such activities.

Implications for ERISA plans

It is not clear whether, or to what degree, the state law at issue in Dobbs and other state laws that ban or restrict abortion services affect plans governed by ERISA. Since the 1973 Roe decision, the year before Congress enacted ERISA, courts have not considered the question of whether ERISA preempts, or trumps, a state law (civil or criminal) that bans or restricts abortion services and/or prohibits providers and individuals from facilitating abortion access. We expect that the ERISA preemption discussions concerning abortion services will become more robust as states consider abortion legislation. Governmental employers and their health plans are not subject to ERISA.

Even assuming ERISA preemption applies, as a practical matter, participants and dependents in states that ban or restrict abortion may not have reasonable access to abortion and/or other reproductive health services. This lack of access could also have consequences for a wide range of reproductive health services, including miscarriage care if there is a dearth of providers both trained and available to provide the necessary medical treatment and/or pharmacies able to prescribe associated medicines.

Action items for employers and plan sponsors

Employers and other plan sponsors will need to decide how this decision impacts their employee benefit programs and other HR policies. Below are some action items to consider. Because these issues may involve legal risk, however, plan sponsors should confer with their legal counsel before moving forward.

• Group health plans — Depending on jurisdiction and other considerations, like whether the plan is fully insured or self-funded, group health plan documents and summary plan descriptions may require changes. Some plan sponsors may also wish to revisit their fertility, prenatal and neonatal benefits in light of the Court’s decision.
• Travel reimbursement benefits — The federal tax code permits employers and plan sponsors to offer tax-free reimbursement of travel and lodging expenses incurred as a result of receiving necessary medical care, subject to IRS limits. Employers that currently offer these benefits should review the provisions and determine their legality and application to out-of-state abortions and other healthcare services.
• Mental health benefits — Depending on the impact of this case on the participant population, consider whether existing mental health benefits sufficiently support the needs of the population. Plan sponsors should review employee assistance programs and other therapeutic offerings.
• Family building — New state laws governing abortion services may affect access to some methods that individuals who wish to start or expand their family might seek to use. Employers offering family-building benefits should work with their service providers to assure that the full scope of these benefits — which can encompass offerings like fertility coverage, adoption and egg harvesting, as discussed in our insight, “Family-Building Programs Are Inclusive Benefits” — remains available to their employees.
• Prescription drug benefits — Plan sponsors should review coverage for various medications, including contraceptives such as levonorgestrel (Plan B) as well as abortion medications and consider whether access to these drugs is permissible on both a retail and mail-order basis. According to research by the Guttmacher Institute, 54 percent of abortions are medication induced.
• Medical reimbursement accounts — Health reimbursement arrangements (HRAs) are individual accounts that permit certain tax-free medical expense reimbursements. Employers with HRAs should review their coverage provisions to determine what, if any, changes to make. For more information on HRAs and how they compare to other medical accounts, see our FSA v. HSA v. HRA Comparison Chart.
• Paid leave — Employers may wish to review their paid-leave policies to determine whether any changes would be appropriate. Depending on workforce demographics, some employers may want to consider increasing their maternity/paternity leave benefits in anticipation of greater needs. Other employers may wish to offer additional paid time off to facilitate access to out-of-state medical treatments.
• Out-of-network coverage — Plan sponsors exploring options to make abortion available and affordable to plan participants can consider expanding out-of-network coverage, to the extent that in-network providers are not readily available or accessible outside of a state where a participant or dependent resides. Some of these plan sponsors may want to explore travel reimbursement options, as well.
• Dependent care and caregiver benefits — Employees may face new and different needs for childcare in light of this decision. Now may be a good time to revisit dependent care and caregiver benefits. These benefits have evolved significantly over the last few years, underscored by the pandemic and may be worth reconsideration.
• Education benefits — Similar to dependent care and caregiver benefits, employers may want to review their education benefits. Employees required to delay their education goals as a result of pregnancy or who have additional dependent educational expenses may benefit from this added support. Often, these benefits include tuition reimbursement, tax-preferred educational assistance and scholarships. As described more fully in our insight “401(k)-Based Student Loan Repayment Program,” employers may also provide financial assistance to employees who are repaying student loans.
• Workforce diversity — The consequences of this case may have a disparate impact on an organization’s workforce diversity. It may be prudent to revisit organizational efforts to continue building and supporting diverse, equitable and inclusive workforces.
• Financial security — Some employee populations may experience financial impact as a result of this Supreme Court case. Employers may wish to revisit their total rewards value proposition to determine if they sufficiently support workforce financial security, which includes the ability to pay for reasonable living expenses (e.g., food, rent, diapers and clothing), manage debt, save for emergencies, education, retirement and childcare. To learn more about financial wellness programs, see our insight.
• Communications — Clear and easy-to-access plan participant and employee communications are even more important when they involve sensitive topics, such as abortion. Organizations should be prepared to help people understand the employee benefits available to them and where to find additional information and assistance, should they need it.