Dobbs and the abortion ban: the benefits world scrambles to deal with a new reality
Employers and advisors are deeply concerned about what the Dobbs ruling will mean for benefit plans, and whether they can fully serve the needs of the enrollees on group health plans, especially in states where an abortion ban is imminent or likely.
By Scott Wooldridge
On June 24, the Supreme Court handed down one of the most momentous decisions in modern history, when it ruled on Dobbs v. Jackson Women’s Health Organization, effectively ending the constitutionally protected right to an abortion in the U.S.
The decision overturned the Roe v. Wade ruling that held the right to an abortion exists under the Fourteenth Amendment of the U.S. Constitution. The ruling has been opposed for many years, mainly by conservatives, who have argued that life begins at conception. The Right to Life movement succeeded in limiting abortion in many states over time, and with the Supreme Court’s swing to the right during the Trump administration, some predicted that court would eventually overturn or further limit Roe v. Wade.
That prediction came true this year, as an early release of the draft of the ruling sparked protest and outrage, followed by the final ruling, which closely followed the wording of the draft.
Justice Samuel Alito, writing for the majority, says, “Roe was egregiously wrong from the start. Its reasoning was exceptionally weak, and the decision has had damaging consequences. And far from bringing about a national settlement of the abortion issue, Roe and Casey have enflamed debate and deepened division.”
So far, the new ruling can hardly be described as easing debate and division. Instead, it seems likely to create chaos and uncertainty on a large scale, affecting many aspects of American life, including business practices such as providing health benefits.
In talking to several experts on employee benefits, it seems clear that employers are deeply concerned about what the Dobbs ruling will mean for their benefit plans, and whether they can fully serve the needs of the enrollees on group health plans, especially in states where an abortion ban is imminent or likely.
The new landscape
Most employers aren’t focused on the constitutional issues in a case like this; they just want to know how it will affect their workers. “I don’t think I’ve had a single person question me about the decision itself,” says Kathryn Bakich, senior vice president and health compliance leader at Segal, an HR and benefits consulting firm. “It’s all about, ‘What am I going to do for my employees? How am I going to make sure that they’re OK?”
This concern seems common among sponsors of health plans. Many companies who have employees in multiple states are facing multiple laws and possible legal issues. Some states, for example have “trigger laws” that may be decades old but will go into effect now that Roe v. Wade has been overturned.
Some states with those laws currently have pro-choice governors and attorneys general who say they will not enforce the laws on the books. Other states have been incrementally chipping away at abortion rights and may attempt to quickly pass more universal bans. In addition, states may end up having both civil and criminal statutes on the books, which will affect the impact on employer-sponsored health plans.
Employers, not to mention employees, are “in a bit of a trap,” Bakich says. Finding solutions to provide consistent policies across states could be a major challenge for employers.
“It’s just one rabbit hole after another,” says Juliana Reno, a partner and chair of Venable’s Employee Benefits and Executive Compensation Practice Group. “It varies state by state, and the thing I worry about for my clients is whether a state makes it impermissible to pay for an abortion that happens in another state.”
The travel benefit—a path forward?
Probably the most-discussed option for employers is whether a travel benefit for health services is offered to employees. “I think really the questions on the benefits side are: ‘Are you going to cover abortion, and are you going to cover travel?’” Reno says. “There are a lot of issues, but those are the two fundamental questions.”
Reno and other experts agree that many employers will try offering a self-funded medical travel benefit that is not limited to travel for abortion services. Because of ERISA, self-funded plans are exempt from most state civil laws, and although the service may be banned on the provider side in State A, employees would have the option to travel to State B, where providers can still offer the procedure.
“The simple solution is to offer a travel benefit,” says Bethany Lopusnak, SHRM-SCP, manager of Benefit Advisory Services for Mineral, an HR and compliance firm. However, she is quick to add a caveat: “But there’s a whole web of laws that can create unintended consequences.”
Plan sponsors might want to talk to a lawyer
It’s the unintended consequences that are keeping HR experts and benefits advisors up at night. The way a travel benefit is structured, or how it is described, could set off legal problems for employers, depending on the state’s laws.
Some experts say that with a hyper-politicized issue such as abortion, companies may want to stay relatively quiet about changes they make. “Don’t put a target on your back” might be the slogan for this approach.
Lopusnak says the use of employee assistance program (EAP) might offer a logical way to provide travel benefits for those seeking abortion services. She notes that with some employers, medical benefits may not be offered to all employees, but an EAP might be available. “If you look at something like an EAP and building in a travel benefit, that’s usually something that all employees have access to, without additional premium cost,” she says. “It’s not without risk; it has its own compliance considerations, but it’s another way employers can look at broadening both their options, as well as broadening the group of employees that they can impact.”
Lopusnak also notes that without the constitutional right to privacy, employers may see states restrict treatment for transgender employees. Employers, she says, risk being overwhelmed, but vendors and brokers can help employers prepare for a range of possible outcomes. “Nobody has a crystal ball,” she adds. “Employers will have to look how to balance number of competing aims. There are baseline things employers can think about and do in preparation for whatever comes down the line.”
Access issues are not a new problem
The issue of access to reproductive services has caused some to point out that access to health services has been an ongoing problem for some populations. “In the last few years, employers have really been looking at diversity, equity, and inclusion (DEI) issues” says Bakich. “Maternal death rates for women of color are higher than those of whites [in the U.S.]. I think this might push employers to really examine maternal care.”
Bakich also points out that rural hospitals have been closing, forcing employees to drive long distances for services, even before new limitations are put on providers. “Travel benefits are great,” she says, “But you need to focus on other benefits for employees, to make sure they have access to contraceptive coverage, maternal health care, and good nutrition.”
With the Dobbs decision, new emphasis will be put on so-called morning after pills, which are usually considered contraception, rather than an abortion service. There are also very serious questions about ectopic pregnancies and other situations that endanger the life of the mother.
“The charitable way to say it is that it’s a brave new world here,” says Reno. “There are going to be a lot of interpretive issues.”
Lopunsak says that brokers and vendors will need to stay on top of the latest developments in order to navigate that new world. “I think it’s important to make sure we’re continuing to stay informed about how these laws are continually changing, and recognizing there’s really a need to be agile,” she says. “We don’t know exactly what’s going to happen. It remains to be seen how far these states will go.”