Employer-Provided Benefit Options After Dobbs

• Published date: 16 August 2022
• Subject Matter: Employment and HR, Privacy, Discrimination, Disability & Sexual Harassment, Retirement, Superannuation & Pensions, Health & Safety, Employee Benefits & Compensation, Privacy Protection
• Law Firm: Winston & Strawn LLP
• Author: Mr Steve Flores, Amy M. Gordon, Susan M. Nash and Jamie A. Weyeneth

This article was originally published in Bloomberg Law. Reprinted with permission. Any opinions in this article are not those of Winston & Strawn or its clients. The opinions in this article are the authors' opinions only.

The US Supreme Court's landmark decision in Dobbs v. Jackson Women's Health Organization, 142 S. Ct. 2228 (June 24, 2022) overturned Roe v. Wade, 410 U.S. 113 (1973) and Planned Parenthood of Southeastern Pa. v. Casey, 505 U.S. 833 (1992), revoking the constitutional right to an abortion. The impact of this decision returned the right to regulate access to abortion to the states.

As a result, many states have introduced new laws, given effect to previously enacted trigger laws and/or have taken the position that pre-Roe laws are automatically reinstated with the effect of reducing or prohibiting a woman's right to seek abortion related care and services.

In response to the Supreme Court's ruling and state action, employers are assessing how and whether to provide additional support for employees and their dependents seeking abortion services and related care if they live in states that restrict or prohibit such access. Since this issue is politically charged on both sides, and there is risk associated with an employer's actions or failure to act, understanding the legal and practical implications is critical.

As discussed more fully below, amid current legal uncertainty, many employers are considering various options to provide abortion-related benefits to their employees, including the adoption of travel benefits in connection with abortion-related services.

OPTIONS TO EXPAND RELATED BENEFITS

Self-Insured Medical Plan

Self-insured medical plans are not subject to state insurance laws, and employers generally have more freedom to design plan benefits and features as long as such plans otherwise comply with applicable federal laws. Thus, if an employer decides to offer abortion care or travel reimbursement to its plan participants, the medical plan can be amended to offer such benefits.

Amending a plan to add such coverage is not a fiduciary act under the Employee Retirement Income Security Act of 1974 (ERISA)'it is settlor in nature. Nevertheless, any such amendment would have to comply with applicable federal law, such as mental health parity, nondiscrimination and tax laws, and adding or expanding such benefits will need to be discussed and negotiated with the plan's third-party administrator(s) (TPAs) to confirm they can and will administer such benefits.

Fully-Insured Medical Plans

Fully-insured medical plans are subject to state laws regulating insurance. Certain states prohibit insurers licensed in the state from issuing insurance policies that provide coverage for medical services associated with abortion. As a result, employers that offer fully-insured medical coverage to employees and their dependents in these states will have less flexibility to make benefit plan changes in response to Dobbs.

Thus, if an employer with a fully-insured medical plan decides it wants to offer abortion care or travel reimbursement to its plan participants'and the state law does not permit an insurance policy delivered in the state to cover such care'the employer will be required to look to other sources to provide this coverage. Even in states without restrictive abortion laws, changes to coverage may require review and approval by the state insurance regulators and special underwriting, so employers with insured medical plans may not be able to implement expanded abortion care benefits quickly.

RELATED BENEFITS OUTSIDE OF MEDICAL PLANS

Alternative Health Plans

Employers that choose to offer abortion care or travel reimbursement but are unable to do so through a fully-insured medical plan, or those that...