Employers’ Medical Group Plans After Dobbs

August 2, 2022


1. Background

In 1973, the U.S. Supreme Court held in Roe v. Wade that pre-viability abortions were protected under a Constitutional right to privacy emanating from the First, Fourth, Fifth, Ninth and Fourteenth Amendments. The Roe decision followed a line of cases in which the Court had concluded that the government could not constitutionally interfere with personal rights to privacy in certain areas such as marriage, contraception, parenthood, child rearing and education. In 1992, in Planned Parenthood of Southeastern Pa. v. Casey, the Court revised its reasoning in Roe, by abandoning its former reliance on personal privacy rights, and basing its holding on the substantive due process clause of the Fourteenth Amendment. In Casey, the Court held that pre-viability abortion is a liberty that government cannot impede with undue burdens or substantial obstacles.

The U.S. Supreme Court overturned both Roe and Casey in its June 2022 decision, Dobbs v. Jackson Women’s Health Organization. Dobbs rejected the notion that pre-viability abortions are protected under the Constitution either as a liberty or a privacy right and allocated the regulation of all abortions to the states. In arriving at its holding, the Court found that abortion is neither enumerated as a right in the Constitution, nor deeply rooted in the pre-Roe, 19th-century history or tradition of the United States, and therefore, is not a “liberty” contemplated by the Fourteenth Amendment.

As a result of Dobbs, pre-viability abortions are no longer legal in every state. Some states now prohibit and criminalize abortions that were once legal. Other states are considering restricting abortions. Some residing in states where abortion is or becomes illegal are expected to cross state lines to obtain legal abortions.

2. Insurance Companies and Employers React

In light of the changed legal environment, companies offering group medical insurance are now adding travel benefits for participants and their family members seeking out-of-state abortions. While this may help defray costs for those seeking abortions, it can create a legal problem for employers who offer group medical plans with travel benefits for abortion only.

If a group medical plan insures travel benefits for abortions but not for access to other medical care, it runs the risk of running afoul of federal non-discrimination laws. Under the Mental Health Parity and Addiction Equity Act (“MHPAEA”), for example, providing travel benefits for abortions but not for mental health or addiction care is potentially an illegal discriminatory practice. One remedy is to provide the same travel benefits for any kind of medical, mental health, or addiction care.

3. Aiding and Abetting

Employers that offer self-insured medical benefits, may also inadvertently run afoul of state criminal laws on abortion. For example, threats of state prosecution have been made against employers that self-insure the cost of abortions or travel to obtain a legal abortion on the theory that the employer is aiding and abetting a state crime. Federal law (ERISA) which generally governs self-insured group medical plans, does not preempt state criminal law, thus potentially exposing the employer to state criminal actions. Insured group medical plans are governed under state insurance laws which may themselves prohibit covering abortions.

Whether a state could hold an employer liable for aiding and abetting illegal abortions if its group medical plan covered the cost of pharmaceuticals intended to end pregnancies (methotrexate and misoprostol) is a separate question. Abortifacient drugs have therapeutic uses for other medical conditions unrelated to pregnancy. If an employer does not know the details of any employee’s or family member’s medical care, the state may have difficulty proving that the employer had sufficient knowledge to support a criminal prosecution for aiding and abetting an abortion through pharmaceuticals.

4. Health Information

Employers should not receive or collect any information regarding the healthcare of any participant in its group medical plan. Because health information related to abortion can be subject to subpoena in states that criminalize abortion, the employer is best protected by not having anyone’s medical information in the first place. If any third-party provider hired by the employer collects the healthcare specifics for employees’ medical reimbursements under any flexible spending account, health savings account or another self-insured arrangement, that information should also be blocked from ever going to or being available to the employer. HIPAA does not protect employers from being required to disclose health information if the matter comes before a court or state law enforcement procedure.

5. Some Takeaways

If an employer decides to adopt travel benefits for abortions in its group medical plan, travel costs should also be extended on the same terms for any other medical procedures, mental health or addiction care to avoid inadvertent violation of federal non-discrimination laws.

The employer should not have access to any participant’s health information for which the participant received benefits under the employer’s group medical plan or another arrangement.

State insurance laws govern group medical insurance plans and may be used to prevent abortion coverage in some states. Self-insured group medical plans are generally governed by federal law (ERISA), however, state criminal laws override ERISA and could be used to prosecute abortion coverage.

The area of law affecting abortion coverage under employers’ group medical plans is evolving and changes are likely on the horizon.

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