The Dobbs Decision: Client Talking Points for Brokers and Advisors
The decision of the United States Supreme Court on June 24, 2022 in Dobbs v. Jackson Women’s Health Organization means that, for the first time in almost 50 years, employers that sponsor group health plans are subject to state-level regulation of abortion access. Employers will naturally turn to their group health brokers and advisors for initial guidance. Below are some talking points for brokers and advisors, including tips on when legal guidance from ERISA counsel may be required.
- First, be aware that there will be no one-size-fits all approach. Each client’s path forward will vary depending upon whether their group health plan is self-insured, or insured, what states they operate and have employees in, and on whether they offer additional benefits such as health flexible spending accounts (health FSAs), health reimbursement arrangements (HRAs), or Health Savings Accounts (HSAs).
- With that in mind, you can start by cataloguing the plans each client has in place, and the states in which they have group health insurance policies in place and employ personnel. Remote work in the post-COVID environment may make it challenging to identify all states in which employees perform services for your client.
a. If, for instance, a client has a fully insured group health plan under a policy issued in a state that has a trigger law, such as Kentucky, then abortions will likely become unavailable under the insured plan. (A discussion of state trigger laws prepared for the American Society for Reproductive Medicine is found here.) You will want to work with the carrier and the client to communicate potential changes to the policy and coverage around abortion services.
b. If, for instance, your client has a self-insured group health plan, it is not directly impacted by state laws prohibiting abortion due to ERISA preemption. However, state criminal laws of general application are not preempted by ERISA. Employers with self-insured group health plans with employees in states that make abortion a crime may need to address potential liability and ERISA preemption issues with legal counsel.
- Medical travel benefits are trending as an area of interest for clients with insured plans in states that prohibit abortion, and for all clients with employees living in those states that may need to travel for abortion services. There are a variety of ways to provide medical travel benefits and a whole host of potential compliance issues that arise. You may not be in a position to advise on all of the issues, some of which cross over into legal advice, but you should be familiar with key points, as follows:
a. Whether to offer the benefit pre-or post-tax – medical travel reimbursements are fairly limited under the tax code and fairly low dollar limits apply under health FSAs ($2,850) and Excepted Benefit HRAs ($1,800). An integrated HRA or a post-tax arrangement can be in an amount the employer chooses.
b. ERISA compliance – a medical travel reimbursement arrangement will be subject to ERISA disclosure requirements and ERISA reporting requirements depending upon the number of participants eligible under the arrangement.
c. Mental Health and Addiction Equity Act and HIPAA Privacy issues – if the arrangement covers medical travel only for abortion services, parity for mental health benefits is a problem. For this reason, it may be preferable to offer benefits for all types of medical travel. Processing reimbursements for such plans will involve review of protected health information and trigger HIPAA compliance if the arrangement covers 50 or more participants or is an arrangement of any size that is administered by a third party. For this latter reason some employers are offering generalized travel reimbursement plans that do not require proof of medical treatment. Note that such arrangements would not be subject to ERISA (and ERISA preemption would not apply to any aiding and abetting laws asserted against employers offering them). Such arrangements would also potentially trigger wide uptake among employees and considerable employer expense.
d. Medical travel reimbursement arrangements will need to be coordinated with other arrangements such as health FSAs and eligibility under a medical travel arrangement will impact HSA eligibility. A careful survey of clients’ benefit landscape is necessary before implementing a medical travel reimbursement arrangement.
e. States such as Texas and Oklahoma have laws that prohibit “aiding and abetting” abortion – including through provision of insurance and reimbursements – which could be directed at employers offering these benefits. Further, a group of Texas legislators (the “Texas Freedom Caucus”) has threatened criminal prosecution of at least one employer that offers travel benefits for those seeking abortion services. The ultimate enforceability of these provisions against employers will need to be determined through litigation, which may take years to unfold. In the meantime, clients contemplating medical travel benefits for abortion services will need competent legal counsel on potential liability and ERISA preemption issues that are raised.
- Be mindful of stop-loss coverage and the need to involve the stop-loss carrier in discussions of any change in self-insured plan design, around abortion services.
- Be aware that the compliance landscape is shifting constantly and that it is important to closely monitor your sources for benefits news. Even as this post was being finished, it was announced that the Dick’s Sporting Goods chain, which had offered a $4,000 travel benefit to employees seeking out-of-state abortions, was sued by “America First Legal,” a conservative group, on the grounds that the travel benefit violated Title VII of the Civil Rights Act by discriminating against female employees who choose to give birth. As many of the key issues in this area will be litigated, fast answers are not available. The safest strategy for the foreseeable future is to stay informed and proceed with caution. The above information is a brief summary of legal developments that is provided for general guidance only and does not create an attorney-client relationship between the author and the reader. Readers are encouraged to seek individualized legal advice in regard to any particular factual situation. © 2022 Christine P. Roberts, all rights reserved.
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