The recent U.S. Supreme Court Dobbs v. Jackson Women's Health decision still leaves a lot of legal and regulatory abortion-access questions unanswered. In overturning the prior landmark Supreme Court decisions in Roe v. Wade and Planned Parenthood v. Casey, Dobbs complicated matters by removing any national standard. Now, employers with employees in multiple states are left to manage multiple regulations.

One of the most pressing issues for employers and plan sponsors is whether they can continue offering abortion coverage through their health plans when coverage networks include states where abortion is illegal, and specifically, whether such plans can reimburse costs incurred when plan participants travel to a different state for a lawful abortion.

Options to provide abortion-related travel and lodging reimbursement

There are options for abortion-related travel and lodging reimbursement for employees seeking abortion outside their state due to new state regulations. Employers have several options depending on their health plan and whether it is fully insured or self-funded. Options broadly fit into four categories:

  • Providing travel and lodging benefits through the existing health plan: Currently this is an option for self-funded employers only, and only applies to medical-enrolled participants. This would not be available under a fully insured plan in a state that restricts abortion access.All plans can still cover abortion in states where it is lawful, but fully insured plans will not reimburse individuals traveling out of state. Self-funded employers will need to check with their insurance carriers and/or third-party administrators (TPAs) to confirm whether the carrier or TPA can oversee or administer these benefits.
  • Provide travel and lodging benefits under health reimbursement arrangements (HRAs)There are two main types of HRAs that could be used to provide these benefits:

General purpose or integrated HRAs must be integrated with a major medical plan to comply with certain ACA requirements. Only employees enrolled in the major medical plan integrated with the general purpose HRA are eligible to participate. One additional drawback is that eligibility for a general purpose HRA precludes eligibility for a health savings account (HSA).

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