The U.S. Supreme Court’s ruling in Dobbs v. Jackson Women’s Health overturning Roe v. Wade, gives states significantly greater power to regulate and/or prohibit abortion. Following the decision, employers may elect to review the provisions of their employer-sponsored health plans once they determine their approach to reproductive services. The seven questions below can guide that review – which should be done in close tandem with legal counsel.
Abortions have decreased over the last decade, declining by about 17% from 2010 to 2019. This includes not only elective procedures but also those to preserve the health of the patient. Examples of issues that lead to nonelective procedures include severe cardiac disease, lifesaving chemotherapy that cannot be administered while pregnant, urgent removal of fetal remains following a natural miscarriage and ectopic pregnancy.
While most employer-sponsored health plans do not explicitly exclude abortion coverage, abortion represents a small medical expense for most employers as over two-thirds of abortions are paid for privately, outside of a health plan. Almost 80% of all abortions are performed at or before nine weeks, and the majority of these are done through medication rather than a surgical procedure.
Under previous Supreme Court decisions, including Roe v. Wade (1973) and Planned Parenthood v. Casey (1992), federal law only prohibited states from creating an “undue burden” on those seeking abortions. Educational requirements, waiting periods, prohibition of later stage abortions and clinic requirements were common, but states were not allowed to ban abortion before fetal viability, generally considered to be around 21 weeks’ gestation. Under Dobbs, states are now free to prohibit abortion entirely or regulate it to a much greater extent.
With the Dobbs decision, providers in states with existing or new abortion prohibitions have stopped offering abortion services, leaving those residents seeking legal abortions to travel to states where the procedure is still permitted, assuming they have financial means and access to transportation.
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Some employers announced plans to cover travel expenses for employees seeking abortion services, often as part of their group health plans, and others expanded existing travel benefits to any situation where access to care is geographically limited.
Employers can embed travel coverage in their existing health plans to avoid creating separate health plans that don’t offer complete enough benefits to comply with the Affordable Care Act (ACA). To maintain their tax-exempt status, travel expenses must fall within Internal Revenue Service’s guidelines. The Mental Health Parity and Addition Equity Act requires that mental health and substance abuse care is treated as other medical care, so some employers offering a travel benefit might need to also include mental health and substance abuse services.
Some employers may seek to cover travel expenses through a taxable lifestyle spending account. They should be aware that travel to obtain an abortion is considered medical care, and such reimbursement could inadvertently make the account a group health plan that would not comply with ACA requirements. Other options include an integrated health reimbursement arrangement (HRA), an excepted-benefits HRA, or an employee assistance program (EAP) that qualifies as an “excepted benefit” (all of which would be ERISA-covered plans). Employers should work closely with their legal counsel to determine how to provide this type of benefit.
The employer and/or its employees could be subject to civil lawsuits under Texas’ SB8 law and similar bills that have passed or have been proposed in other states, which deputize private citizens to sue any party that “aids and abets” an abortion. Although there may be defenses to such lawsuits, including ERISA preemption in some circumstances, it is still unclear how courts will interpret those statutes.
Finally, employers should address employee concerns regarding privacy and confidentiality, including ensuring that reimbursement not be included in their personnel record.
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Abortion-inducing drugs are effective up until 10 weeks of pregnancy and are proven safe and effective; few using these require medical evaluation as self-managed medication abortion is statistically equivalent to provider-supervised medication abortion. In fact, the Food and Drug Administration (FDA) removed the requirement that abortion drugs be prescribed in-person in 2021.
The U.S. Justice Department has stated that it will oppose any state ban on prescribing these drugs “based on disagreement with the FDA’s expert judgment about its safety and efficacy.” Telemedicine providers can prescribe them using proper clinical protocols, but some states require telemedicine providers to have local licenses – which means this option will likely not be available in all states.
Those who have miscarriages or failed abortions who retain fetal tissue are at high risk of severe infection and death. While some states have enacted or intend to enact bans on abortion that could restrict medical procedures for those with nonviable pregnancies, the Health and Human Services Department has stated that the Emergency Medical Treatment and Labor Act requires hospitals and doctors to provide medically necessary treatment and “preempts any directly conflicting state law or mandate that might otherwise prohibit or prevent such treatment.”
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Enhancing mental health benefits is the second-most cited health care priority for employers in the next two years. The Dobbs decision may further exacerbate existing mental health challenges by creating additional anxiety or depression issues among employees and tension in some workplaces. Employers may consider promoting mental and emotional health support and resilience through communications and education related to EAP, manager awareness, support and related training, and other resources.
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The majority of employers (54%) offer benefits for fertility services, and a quarter of such employers expect to increase the generosity of their fertility program in 2023. Some states have pending legislation that would define birth as the moment of conception, which could prohibit in vitro fertilization methods or require that only a single egg be fertilized at any given time. Such rules could also prohibit pre-implantation genetic testing, increasing the risk of genetic diseases in the offspring of those who have a family history of genetic diseases. If fertility services are not available locally, some employers may consider offering travel benefits for fertility services.
Additionally, many employers offer menstrual and pregnancy trackers as a perk to members – for example, to help maximize their chances of achieving pregnancy and to better follow their pregnancy. Because of the risks in how this personal data could be used, employers should discuss the continuation of these apps with their legal counsel. If employers continue to offer these programs, they should clarify vendor privacy and data retention policies and alert members to potential risks.
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The ACA requires that employer-sponsored health plans provide access to contraception without out-of-pocket costs, including long-acting reversible contraception (LARC) such as intrauterine devices and progesterone injections or implants that are more effective at preventing pregnancy than oral contraceptives or barrier methods such as condoms. Employers should understand which utilization management programs are in place and how they impact access to effective birth control (e.g., exclusions for specific brand-name drugs, dispensing limits).
These forms of birth control are medically understood to prevent ovulation or implantation of an embryo and do not themselves cause abortions. Some state legislators have, however, proposed laws that would limit access to such forms of birth control. This will be a constantly shifting area of legislation, so employers should regularly consult legal counsel to stay apprised of any laws that would apply to their activities and how they may intersect with ACA coverage requirements.
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Cost impacts of the Dobbs ruling on employer-sponsored health care could vary widely. If more pregnancies are carried to term, overall medical spending will increase. Larger family size would also increase the cost of providing health insurance. Demand for mental health services could also increase. Employers should also expect an increase in short-term disability expenses if maternity leave is funded through short-term disability insurance.
The cost impact of an employer’s travel benefit will depend upon the scope of medical services covered, the distance members will travel and how members use the benefit.
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As part of their focus on workforce diversity, equity and inclusion, many organizations set representation targets at the manager and leadership level that are often focused on race and gender. Decreased access to abortion could lead those unable to obtain abortions to cut back on their hours worked or leave the workforce entirely. Employers can carefully evaluate their leave policies (illness, maternity and parental) and childcare benefits to determine how these benefits and income replacement support workforce representation goals at all levels. Such an evaluation could help determine program changes or suggest improved communication for underutilized programs
The decision in Dobbs v. Jackson Women’s Health will lead a significant number of states to amend their laws to restrict abortion and possibly other reproductive health services. These changes are likely to evolve quickly and be in flux for quite some time. Given the pace of modifications to relevant law, employers should review their benefits with an eye to these seven considerations. Regardless of their decisions and courses of action, organizations will need to monitor developments closely in conjunction with their legal counsel and provide thoughtful and explicit communication regarding any coverage changes and wellbeing assistance in order to provide employees with the right guidance and support.
Jeff is an internal medicine physician and has led WTW’s clinical response to COVID-19 and other health-related topics. He has served in leadership roles in provider organizations and a health plan and is an Assistant Professor at Harvard Chan School of Public Health.
