|September 2022 Volume 20, Number 9|
Employers Should Beware of Compliance Issues with Abortion Benefits
The recent Supreme Court ruling on abortion has left many employers scrambling to understand the impact it will have on their ability to provide health coverage for their employees.
The ruling, which effectively reversed Roe v. Wade, means that states are now free to restrict or even end access to abortions.
Are You Fully Insured or Self-Insured?
When it comes to abortion-related benefits, self-insured employers might have more wiggle room in restrictive states, depending on how courts will view the interaction between the Employee Retirement Income Security Act (ERISA) and state statutes. The advantage is that they can customize what coverage they offer.
Travel and Tax Considerations
Employers need to be aware of the tax implications of employee travel reimbursements. Generally, reimbursements will be taxable compensation unless they qualify as medical expenses. Depending on what is reimbursed, some costs might qualify as medical care, but not all. To comply with the Affordable Care Act, reimbursements that qualify as medical expenses must be integrated with the business' group health plan.
Get Everyone on Board
Experts recommend that employers review any plans that provide abortion-related coverage to ensure compliance, as laws vary from state to state and access to medical treatment can differ. This is especially critical for multistate firms.
Employers might also consider exploring other options, such as telemedicine, women's health services, or healthcare navigation. Instituting policies to provide time off or leave for women who have to travel to get the care they need should also be considered.
Using Spending Accounts
Specialists advise employers to consider reimbursing abortion travel through health reimbursement arrangements (HRA), health savings accounts (HSA), or health flexible spending accounts (FSA). If opting for an HRA or FSA, expenses will require supporting evidence that the abortion was performed, which is not the case for an HSA as individuals are expected to maintain their own records.
Risk of Liability
Employers should be cautious about changing the group health plan to offer abortion-related travel coverage if they are in a state where abortions are illegal, as this could expose them and their employees to legal risks.
What Should Employers Consider?
Experts advise businesses wishing to provide their employees with abortion-related benefits to consider evaluating their provider's network. If it's limited, it might be possible to extend in-network access or add a benefit for out-of-network treatment so employees can get an abortion in states where it is still legal. Secondly, employers should consider adding travel and lodging coverage under their existing plan, as the IRS sees abortions as medical care, so associated costs are classed as medical expenses.