Medical Travel Reimbursement Benefits Under Dobbs Decision


On June 24, 2022, the Supreme Court docket of the USA issued its extremely anticipated resolution in Dobbs v. Jackson Girls’s Well being Group, No. 19-1392. The Dobbs resolution expressly overrules the 2 key precedents that established and upheld a constitutional proper to abortion—Roe v. Wade (1973) and Deliberate Parenthood of Southeastern, Pa. v. Casey (1992)—and provides states the authority to manage abortion. Justice Alito wrote the opinion for the five-justice majority. Chief Justice Roberts concurred within the end result solely, urging a narrower ruling on the challenged Mississippi legislation. Justices Breyer, Sotomayor and Kagan dissented.

Within the wake of Dobbs, employers with well being plans that cowl abortion companies must decide whether or not or the right way to present continued entry to this comparatively little-used profit, particularly in states that can mechanically limit abortion entry now that the ruling has been issued, or which are anticipated to take action quickly.

Many self-insured employers are contemplating including medical journey expense reimbursement advantages to their current medical plans. Doing so raises some Worker Retirement Earnings Safety Act of 1974 (ERISA), tax, and different federal legislation points that employers could have to rigorously consider, in addition to potential points beneath quickly evolving state legal guidelines. For instance, pre-Dobbs, Oklahoma and Texas each enacted “fetal heartbeat” legal guidelines that prohibit aiding and abetting, together with by reimbursing by way of medical health insurance, an abortion carried out in violation of these legal guidelines.

State legal guidelines that relate to worker profit plans are broadly preempted by ERISA. And courts could effectively uphold ERISA preemption challenges to state abortion legal guidelines that have an effect on profit plans, together with civil provisions on “aiding and abetting” abortions that violate state legislation. However ERISA preemption has necessary limits. For instance, state legal legal guidelines of normal utility wouldn’t be preempted, and states could replace their normal legal legal guidelines following Dobbs.

Many employer well being plans typically cowl abortion companies, although these companies, like many others, will not be particularly talked about in plan paperwork or abstract plan descriptions (SPDs). Many well being plans additionally reimburse journey bills in some restricted conditions, equivalent to in a middle of excellence program for transplants or different high-cost procedures. Some employers added or broadened journey and lodging reimbursement advantages after Texas enacted Senate Invoice (SB) 8 in 2021. The leak of the draft Dobbs opinion in early Could 2022 vastly elevated employer curiosity in journey reimbursement.

Federal legislation typically doesn’t require well being plans to cowl abortion companies. The U.S. Equal Employment Alternative Fee, although, has interpreted the Being pregnant Discrimination Act to require employer well being plans to cowl abortions in instances the place the lifetime of the mom can be endangered if the fetus have been carried to time period. Well being insurers are topic to state insurance coverage legal guidelines, together with legal guidelines governing whether or not insurance policies could or should cowl abortion companies, so insured plans could have much less discretion relating to how and whether or not to cowl abortion companies than self-insured plans have.

Among the many points for employers to contemplate as they digest Dobbs and its influence:

  • Third-party directors will not be keen or in a position to administer journey reimbursement packages instantly, particularly complicated or personalized variations. Some could possibly supply a regular package deal or method to those reimbursements.

  • Pharmacy profit managers (PBMs) and telehealth suppliers may be affected by new state restrictions on abortions. Many employer plans at present cowl abortion drugs, which will be shipped to a affected person’s residence following visits with a medical supplier, in individual or just about. PBMs and telehealth corporations would be the goal of future state legal guidelines and laws on this space.

  • Sure journey and lodging bills will be reimbursed as “medical care,” and thus are excludable from revenue for an worker. For instance, the Inside Income Service (IRS) units mileage charges that will apply when sufferers drive to clinics, and the IRS caps lodging bills at $50 per evening for a affected person and $50 per evening for a journey companion, if wanted for the affected person to acquire medical care. Meals and different private bills are usually not “medical care” for tax functions, and subsequently, reimbursements for this stuff are usually not excludable from an worker’s taxable revenue.

  • Employers offering reimbursements by way of an current well being plan might typically make the most of the prevailing compliance construction in areas equivalent to ERISA reporting and disclosure, persevering with well being protection beneath the Consolidated Omnibus Price range Reconciliation Act of 1985 (COBRA), the Reasonably priced Care Act (ACA) and Well being Insurance coverage Portability and Accountability Act (HIPAA) privateness protections. Employers that want to contemplate providing reimbursements separate from an current plan could need to contemplate rigorously compliance points beneath these legal guidelines.

  • Employers contemplating reimbursing for sure medical journey—however not for journey associated to psychological well being or substance-use dysfunction advantages—may need to consider dangers beneath the Psychological Well being Parity and Dependancy Fairness Act of 2008 (MHPAEA). The MHPAEA typically restricts plans from making use of annual limits, monetary necessities, and therapy limitations to psychological well being and substance-use issues that aren’t utilized, or are usually not as stringently utilized, to medical advantages typically.

© 2022, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
Nationwide Legislation Assessment, Quantity XII, Quantity 175

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