Companies that want to offer travel benefits for abortion services should include them in their health plans, not separately, legal experts say.
The advice comes from many employee benefits advocates as more companies like Walmart offer travel coverage to employees in states where abortions are restricted following the U.S. Supreme Court’s June 24 decision in Dobbs v. Jackson Women’s Health Organization that overturned a federal constitutional right to abortions.
Walmart said Aug. 19 that it is expanding its travel benefits so that employees and their family members can access covered services that are not available within 100 miles. It also said its self-insured health care plans will cover abortion when there is a health risk to mother, rape or incest, ectopic pregnancy, abortion or lack of viability of the fetus.
The number of US employers offering travel benefits for abortion services is expected to double over the next few years in the wake of the ruling, insurance consultancy Willis Towers Watson PLC announced this month. Thirty-five percent of the 305 employers surveyed as of August 1 now offer travel benefits for elective and medically necessary abortions, another 16% plan to offer the benefit in 2023 and 21% are considering it.
Among employers with fully insured plans, 93% of companies expect to cover elective abortions by 2023 in states where abortion is legal, compared with 82% of self-insured employers in those states, the survey found.
“On the self-funded side, you have the flexibility to add it to the plan,” Gabrielle White, benefits and compensation counsel with the New York law firm Davis+Gilbert LLP, said in an interview. Employers pay claims directly and have greater control of self-funded plans. They differ from fully insured group health plans that are purchased by employers, who pay premiums to health insurance companies that assume the risk of claims coverage.
Self-funded plans are regulated by the federal government under the Employee Retirement Income Security Act, while fully insured plans are limited by state laws and regulations where they operate. In states that restrict abortions, fully insured plans may be prohibited from covering them.
More than 120 companies have announced travel coverage for abortion care, most of which have at least 500 employees, Lizamarie Mohammed, senior program associate at Rhia Ventures, said in an interview. Rhia Ventures, a San Francisco-based firm that invests in reproductive health care, tracks companies that publicly disclose their abortion benefits.
Medical travel covered by tax law
Travel is included in the definition of medical care in Section 213 of the Internal Revenue Code, White said.
“If you’re paying for medical care, then if it’s not covered through the health plan, there’s a risk that you’re creating a health plan” that’s subject to different legal requirements that the company’s existing health plan already meets, she said. . “It may be difficult for that particular benefit to meet those requirements.”
Companies may offer travel benefits only for abortion, but many companies are offering travel benefits for any covered medical procedure, White said.
Under the latest terms, if there are no medical providers for a covered procedure or benefit within a certain distance, travel expenses are covered to get care, she said. “It’s not just limited to abortion.”
That could help protect companies in a state that has laws against aiding and abetting abortion, such as Texas, White said. “It’s harder to claim that you’re aiding and abetting an abortion when it’s a broader-based benefit,” she said.
While larger companies often offer travel benefits to centers of excellence, they are limited to specific procedures such as organ transplants that are performed at only a few hospitals, White said. Extending travel benefits builds on systems already in place, making it easier to administer, she said.
Smaller customers with fully insured plans in states that allow it may have the option of offering travel benefits through those group plans, White said. Blue Cross Blue Shield of Massachusetts said June 24 that it had developed a travel benefit that employers could choose to cover travel of at least 100 miles to access abortion services.
Companies can also offer general travel benefits, such as providing cash for people to travel, White said. But that’s not likely to be a choice for many companies since employees may use the money for vacation and need it later for abortion services, she said.
Travel coverage limitation
For employers with self-insured plans, “most of those employers that will cover abortion will cover it through a travel benefit” in states where abortions are restricted, Regina Ihrke, senior director and leader of health, equity and wellness with Willis Towers Watson said in an interview. The travel benefit can be administered through the health plan, she said.
The fully insured side is “a little more difficult,” Ihrke said. Fully insured plans in states that do not restrict abortions will cover the abortion travel benefit as they do today, or are more likely to offer a travel benefit or funding through a health reimbursement account or health savings account, but 37% of the insured Plan sponsors aren’t sure which option they’ll get, she said.
A “vast majority” of employers are limiting travel coverage to beneficiaries who are at least 100 miles from a service provider, Ihrke said.
The average limit for travel expenses and abortion services is about $6,700, she said. But cost is not a big issue, she said. For companies with at least 10,000 employees, “we’re looking at fewer than 10 total medically necessary and elective abortions that cover claims today” each year.
Opening of other travel benefits
Once employers begin expanding coverage for medical travel expenses, it begins to open them up to requests for travel coverage for other services, such as gender affirmation and fertility services, Ihrke said.
“There are other things that are out there that we’ll start to see as each state makes its own decision about coverage,” which could include banning certain medical procedures. “Employers need to look at all of their travel benefits coverage in a much more holistic way.”