Employers Should Be Aware of Issues Related to Abortion Benefits

Employers Should Be Aware of Issues Related to Abortion Benefits

The Supreme Court’s recent decision on abortion has left many employers scrambling to understand how it will affect their ability to provide health care to their employees.

The decision, which changed Roe v. Wade, means that states now have the right to restrict or eliminate access to abortion.

In response, some employers are offering help for employees to leave the state for an abortion. This is a sensitive issue, and employers should be aware of the potential compliance issues before moving forward.

Are You Fully Insured or Self Insured?

When it comes to abortion benefits, self-insured employers may have more time in restrictive states, depending on how courts interpret the interaction between the Employee Retirement Income Security Act (ERISA) and state law. The good thing is that they can change what they offer.

Small market uninsured plans, on the other hand, are responsible for meeting their state’s definition of health benefits and providing coverage accordingly. As a result, employers may only provide coverage that they are legally permitted to provide, which may not result in abortion-related benefits in some states. Experts recommend offering self-reimbursement of HRA (HRA) as an alternative.

In many communities, abortion has been included in the list of essential health services, and others may follow suit. Others may add the benefits of abortion-related travel to the list.

Self-insured employers can change their coverage to include travel expenses and out-of-network abortions.

An option for fully insured employers would be to switch to a self-insured option, but this may not be feasible for businesses with fewer employees. However, a self-funded plan can give employers more options.

Travel and Taxes

Employers should be aware of the tax return on travel expenses. In most cases, the refund will be a tax refund unless it is for medical expenses. Depending on the reimbursement, some of the costs may be for medical care, but not all. In order to comply with the Affordable Care Act, reimbursements that are supposed to be medical expenses must be included in the business group health plan.

Get Everyone On Board

Experts recommend that employers review any plans that offer abortion care to ensure compliance, as laws vary by state and access to medical care varies. This is especially important for many companies.

Companies should also consider talking to their medical providers, third party administrators (TPA), and employee assistance programs (EAP) about abortion-related benefits and accommodations they may offer. Some companies are also looking for solutions that do not depend on the actions of carriers or TPAs, such as setting up emergency funds or life accounts to cover the cost of travel and accommodation without being restricted by their health plan.

Some issues employers should consider when seeking professional legal advice include:

  • ERISA and tax limitations: Although group health plans can reimburse medical expenses, problems can arise if coverage is provided outside of the plan and exceeds IRS limits.
  • The parallels between mental health and the limitations of countless drugs: Compliance issues may arise if travel benefits are included in the health plan but not provided for mental health or substance abuse care that is not available locally.
  • Privacy protection: Group health plans are subject to HIPAA privacy and security regulations. A business partnership agreement may be required when a new vendor is added. Travel and accommodation benefits provided outside the scheme are subject to certain privacy rules.

Employers may also consider other research areas, such as telemedicine, women’s health services, or health travel. Establishing policies to provide time off or leave for women who have to travel to get the care they need should also be considered.

Account Use

Experts advise employers to consider reimbursing abortion travel through health reimbursement plans (HRA), health savings accounts (HSA), or health spending accounts (FSA). If you are choosing an HRA or FSA, the funds will require proof that the abortion was performed, which is not the case with an HSA as individuals must keep their own records.

Liability Risk

Employers should be careful when changing their group health plan to provide abortion-related travel coverage if they are in a state where abortion is illegal, as this could put them and their employees at legal risk.

In Texas, for example, most abortions are now illegal after six weeks, and private citizens can sue anyone who facilitates or prevents illegal abortions. Therefore, experts warn that employers who provide payments related to abortion may face lawsuits.

What Should Employers Consider?

Experts advise businesses that want to offer their employees abortion-related benefits to think about how they operate. If it is limited, it may be possible to increase access to the Internet or increase the value of offline services so that workers can access abortion in states where it is still legal. Second, employers should consider adding travel and accommodation under their existing plan, since the IRS considers abortion a medical treatment, so the travel costs are counted as medical expenses.

To learn more about employee benefits, contact INSURICA today.

Copyright © 2022 Smarts Publishing