On June 24, 2022, the U.S. Supreme Court ruled on Dobbs v. Jackson Women’s Health Organization and overturned Roe v. Wade, which in 1973 was a momentous U.S. Supreme Court decision legalizing the right to an abortion. The Dobbs Decision now gives the authority to each individual state the choice on whether to continue to allow abortions, restrict or ban abortions. The Dobbs Decision is new and uncharted territory in many aspects and provides challenges for employers and Third-Party Administrators of tax-advantaged health savings plans, specifically, the treatment of self-insured health plans. Since the ruling, discussion around abortion travel benefits have increased significantly, and many employee benefit experts are working with employers directly to provide individual guidance.
How the Dobbs Ruling Can Impact Employees
If a state chooses to ban abortions, where it was previously legal, individuals in those states may have the option to travel to another state to obtain a legal abortion. Each state-by-state decision creates the need for employers to examine their health plan documents offered through insurance companies, as well as self-insured plans, such as Flexible Spending Accounts, Health Reimbursement Arrangements and Health Savings Accounts. This ruling has brought many questions and to date, very few clear answers.
Is Abortion an Eligible Expense Under a Pre-Tax Spending Account?
Abortion is considered an eligible expense under Section 213(d); therefore, the cost of the procedure could be eligible under self-insured plans if performed in a state where it is legal. Additional eligible costs include the travel expenses to another state because travel for medical care is considered a covered expense. Covered travel and lodging expenses for medical procedures is a common group health plan component and employers could consider including abortion services with all other medical procedures.
Abortion Travel Benefits: What’s Covered?
Travel costs include airfare, mileage by car, and lodging. The current allowance for medical travel reimbursement is .22 cents per mile if traveling by car, and expenses for tolls and parking are included. Lodging is capped at $50 per night. Meals are typically not included as they aren’t medical care, unless provided for in a medical facility.
How to Incorporate Abortion Travel Benefits into Your Existing Benefit Options
According to recent studies, most employers are reviewing the need to cover travel expenses to states where abortion procedures are legal. Employers looking into offering a travel benefit through a self-insured plan should consult with both a benefits consultant and legal counsel to consider how the plan might be impacted by ERISA, ACA, HIPAA, and COBRA as well as civil and criminal laws. As with any new or change to a plan design, please consult with your P&A Group Benefits Consultant to see if your company can adopt abortion travel benefits.
As more information becomes available, P&A will provide updates.