Answering Your Dobbs v. Jackson Questions

The following answers to these Dobbs v. Jackson case questions are provided in consultation with compliance attorneys. They are meant purely for guidance. Please consult your own legal counsel before launching a benefit program related to this topic or any other. 

Are abortion services still a covered medical expense in health plans and reimbursement accounts? 

Short answer: It depends on the kind of medical coverage a citizen has and how they obtained it—individual/ACA coverage, a self-insured employer, or a fully insured employer. More on these distinctions below. 

There are many details yet to be determined on the eligibility of abortion services as a covered medical expense. These questions and answers are rooted in how existing federal regulation will interact with new state regulations. Two of the main federal regulations are: 

• ERISA – The federal law that governs a medical plan sponsor’s obligations to its customers will likely, at least until other court decisions may rule differently, supersede a state’s prohibition on providing abortion services as a covered medical expense under a plan governed by ERISA. A key determining factor of ERISA jurisdiction is whether an employer’s health plan is self-insured or fully insured (more on that below). 

• Section 213(d) – This section of the federal tax code specifies which medical procedures and supporting services are considered eligible expenses for tax- advantaged accounts (HSAs, FSAs, HRAs). Abortion services lawfully obtained remain an expense for medical care under Section 213(d). This means that, regardless of whether abortion services are covered by a health plan, they are still eligible for reimbursement through CDH accounts (see table below for details). 

With these parameters in mind, here’s a quick-glance table that explains what has changed and what remains the same: 

What has changed legally with this decision? 

The 50 years of law derived from the Roe v. Wade decision made abortion a Constitutionally protected right, which was governed at the federal (national) level. Over the years, other cases have changed the extent and nature of that Constitutional protection but abortion itself could not be outlawed in any state or US territory. The Dobbs court case decision flips that understanding by asserting that abortion is not a Constitutionally-protected right under federal law and therefore can be regulated—and outlawed—at the state level. In other words, governance around the regulation of abortion has largely shifted from the federal government to each individual state government—instead of one, federal law, we will see 50 individual laws, as well as existing regulation at the Federal level, subject to possible future legislation at the federal level. 

Is it permissible for employer-sponsored plans to provide coverage for abortion services? 

• Self-Insured Plans – These are plans where the employer is also the “sponsor” (i.e., they assume responsibility for paying all claims, generally using a mix of employer funds and employee contributions). Although there may be “stop loss” insurance in place to limit the employer’s risk exposure, benefits are not provided through a group insurance policy issued by an insurance company. 

• It’s generally still permissible to cover abortion services for self-insured plans that are covered by (federally administered) ERISA regulations. This would include most private-sector self-insured health plans (plans maintained by churches and governmental entities are not subject to ERISA). For self-insured health plans governed by ERISA, ERISA will preempt any state law that purports to limit or regulate what benefits may be provided under the plan. 

• It may be advisable to limit abortion services to those lawfully obtained,i.e.,if an employee lives in a state where abortion services have been greatly reduced or eliminated, a self-insured plan should only make such services reimbursable for legally obtained services in another state. Many plans already have a general exclusion for services that are not lawfully provided. 

• Non-ERISA plans should consider applicable state law before determining eligibility of abortion services, as ERISA will not preempt state law in the context of non-ERISA plans. 

• For more on legality at the sponsor and/or employer level, see the later discussion on “aiding and abetting” and other state issues. 

• Fully Insured Plans – These plans are generally sponsored by health insurers and are approved and regulated at the state level rather than via ERISA. 

• These plans will continue to be governed by state law, so a state-by-state analysis will be needed to determine eligibility of abortion services, including travel benefits, as reimbursable expenses. 

• State insurance law is not preempted by ERISA, even for ERISA plans. This means that an insurance policy issued in connection with a plan providing fully insured coverage will need to comply with the benefit mandates and other state insurance laws applicable to the policy. Typically, an insurance policy issued in a particular state must comply with the insurance laws of that state. For example, if an employer obtains its group insurance policy in a state where state law prohibits insurers from covering elective abortion services, those services will be excluded for all employees covered by the policy, which may include employees living in another state where abortion services are not restricted (or are even protected). It remains unclear to what extent the state insurance laws of a state other than the state where an insurance policy is issued may be applied in an “extraterritorial” manner to regulate the insurance policy. For example, if an insurance policy is issued in State A where it is permissible to cover all types of abortion services, but it insures employees living in State B where it is impermissible to cover abortion services, it is unclear whether State B may require the insurer to limit coverage of abortion services for employees living in State B. 

Are travel expenses related to obtaining abortion services still permissible? 

Yes, it is generally permissible for employer-sponsored plans to provide coverage for abortion- related travel. It is similar to the considerations for coverage of abortion services themselves. However, as with the considerations for ERISA and non-ERISA plans, covering travel expenses has some nuances and compliance considerations, as further detailed in these FAQs. 

In particular, travel expenses related to any medical need is considered medical care itself. A plan that provides or reimburses medical care qualifies as a “group health plan,” which means it is subject to the rules governing group health plans. These rules apply whether the coverage is taxable or tax-free, and whether it’s offered through a health plan (HSA, FSA, HRA) or independently of one (such as through an LSA—lifestyle spending account). 

Additionally, for coverage of travel expenses that is intended to be tax-free, conditions and limitations apply in determining when coverage is tax-free. 

What is permissible for tax-free reimbursement of travel expenses related to travel for abortion services? 

The following chart outlines the reimbursement standards for medical-related travel: 

Do these tax rules apply to all reimbursement accounts? 

Yes, these rules apply to HSAs, FSAs and HRAs provided three guidelines are followed: 

1. Reimbursement rules need to meet requirements for tax-free treatment (see previous FAQ answers). 

2. Services must be lawfully obtained in the jurisdiction where they are provided. 

3. Substantiation and other rules continue to apply. 

Are there additional tax issues that should be considered? 

Yes, here are some additional tax issues to keep in mind, depending on the context: 

Are abortion and reproductive health-related medicines and drugs impacted by the Supreme Court’s decision? 

It is currently unclear as to whether such drugs, whether prescribed or over the counter, will be impacted. For now, they should be considered reimbursable if they are “legally procured.” But as the state-by-state picture becomes clearer, please review eligibility in your state with a legal advisor. 

Can I create a travel expense reimbursement benefit just for abortion- related services? 

Generally, no, if the travel benefit will be provided in connection with a traditional health plan, such as when providing a travel benefit as a feature of the health plan or through an “integrated” HRA. The Mental Health Parity and Addiction Equity Act (MHPAEA) prohibits treating medical benefits more favorably than mental health benefits. Practically speaking, this means that if you want to cover travel benefits for abortion services, which are a type of medical benefit, you should also cover travel benefits for comparable mental health services. 

There are two ways to address the stipulations of the MHPAEA: 

1. Cover travel for all types of care when necessary to travel outside a specified geographic area. In other words, so long as you specify that the travel benefit only applies when an employee must travel outside of (or to) a specified geographic region to receive treatment. 

2. Provide travel benefits through a program that qualifies as an “excepted benefit” (e.g., Employee Assistance Program—see below) 

What other regulations must I consider when creating a travel expense benefit for employers to make available to employees? 

As a reminder, medical travel is considered medical coverage, and medical coverage is considered a “group health plan,” even if employees do not receive other health coverage from their employer. 

There are two options for employers to offer a travel expense benefit for abortion-related services through an account-based plan. Each has its own regulatory considerations, as outlined throughout this FAQ. 

• “Integrated” Plans – These are provided through the existing footprint of employer coverage. Typically, this will be an HRA that is offered alongside a traditional health plan. 

• “Excepted Benefit” Arrangements – These offerings may use reimbursements as the foundation but are considered “standalone” benefits offerings, not directly tied to “integrated” plans. Typical excepted benefit arrangements are FSAs and EAPs. 

In either case, the following regulations should be considered as you review your options: 

Among the “excepted benefits” options, what may apply for providing travel expense benefits? 

What do I need to follow and comply with at the state level? 

(The answer to this question is provided as of July, 2022. Please seek advice from a legal professional before taking action in your state.) 

There will be significant changes to state laws—both those that will limit or remove abortion services as well as those that may expand them. While it’s too early to know exactly how state- level changes, and inevitable future court cases, will impact coverage requirements and the applicability of abortion coverage and related travel expense programs, it’s important to keep in mind a number of state-based considerations when considering additional coverage programs. 

Some state laws will (or have already) prohibit(ed) coverage of abortion services or related medical care by health plans. 

• For ERISA plans (non-self-insured), these laws generally would be preempted  

• However, it is yet unclear how far ERISA preemption extends 

Some state laws penalize conduct that “aids or abets” an abortion. But does a travel benefit “aid or abet” abortion? 

• It may depend on the specific law at issue 

• Example: Oklahoma – Conduct can be penalized if it “aids or abets the performance or inducement of an abortion, including paying for or reimbursing the costs of an abortion through insurance or otherwise, if the abortion is performed or induced in violation of this act.” 

• Would only seem to prohibit reimbursement related to abortions unlawfully obtained in Oklahoma 

To avoid risk, seek the advice of legal experts to monitor state level developments; only provide travel benefits in connection with abortions or services that are “lawfully obtained”; and review indemnification and hold harmless provisions in service agreements. 

What about the participant data privacy? 

For those administering reimbursement plans, HIPAA privacy requirements apply for all aspects of coverage, since providing medical service reimbursement qualifies as medical coverage, which in turn qualifies as a group health plan. HIPAA restricts uses and disclosures of protected health information maintained in connection with a group health plan. Disclosures of protected health information are generally prohibited without an individual’s authorization, but there are exceptions. Disclosure is permissible (although not required) when required by law or sought by law enforcement, so long as disclosure is sought through an appropriate order, such as a subpoena or warrant. In states that pursue disclosure of health information related to abortion services or abortion-related travel, it is anticipated that health plans and their business associates will respond to requests for disclosure, if presented with a subpoena or other appropriate legal process. Although disclosure is not mandated under HIPAA in these scenarios, it is permissible, and the failure to make disclosure may result in legal problems for 

Where do I go from here? 

The Dobbs v. Jackson decision will continue to be a fluid and ever-changing situation. Additional court cases will help fill in the gaps, but until then you can take away a few things: 

• Clarity is here as a guide, but not legal counsel. For specific readings of the law, or information specifically related to the Supreme Court’s ruling on Dobbs v. Jackson, please discuss with your counsel. 

• The information we know today may change tomorrow. Expect updates as new information is learned and interpreted. 

• With Clarity’s Lifestyle Benefit Accounts, you will have the tools you need to offer a flexible and dynamic benefit to your employees.