The essential holding of the Supreme Court’s recent 6-3 decision in Dobbs v. Jackson Women’s Health Organization is that a woman’s ability to obtain an abortion in the United States is now to be determined entirely under state law. Under Dobbs, abortion services will, by and large, be unavailable in anti-abortion states, but still freely available in pro-abortion states. Thus, the effects of Dobbs on an employer’s health plan will depend largely on geography, and in many instances, especially for smaller employers, these effects will be obvious and unavoidable. However, Dobbs poses numerous questions for employers that want to offer abortion benefits to employees working in anti-abortion states.
Abortion Not an “Essential Health Benefit;” the Hyde Amendment; ERISA Preemption
It is useful at the outset to review a few basic legal facts concerning Federal laws and abortion. First, notwithstanding Roe v. Wade, 410 U.S. 113 (1973) and Planned Parenthood v. Casey, 505 U.S. 833 (1992), no Federal law has ever required that abortion services be included in an employer’s health plan or provided via federally subsidized individual health coverage. Abortion services are not an essential health benefit under the Affordable Care Act, and therefore are not required to be included as benefits under employer group health plans or under individual health insurance policies available through the Federally managed health care exchange. And under the so-called “Hyde Amendment,” Federal dollars cannot be used to pay for abortion services under Medicaid except in cases of rape or incest, or where the pregnancy endangers the mother’s life.
Second, while the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) generally “preempts” state laws that relate to employee benefit plans (meaning that ERISA prohibits the application of such state laws to employee benefit plans), ERISA does not preempt state laws governing insurance. The fact that ERISA does not preempt state insurance laws from preemption means that states are free to regulate employee group insurance policies sold within their borders. Because of the lack of ERISA preemption for state insurance laws, abortion coverage is generally already severely restricted in group and individual health insurance policies that cover employees in anti-abortion states.
Finally, ERISA does not preempt state criminal laws of “general application,” a fact that will likely be extremely important to employers in anti-abortion states.
Impact of Dobbs on Fully-Insured Employer Health Plans
Because state laws regulating insurance are not preempted by ERISA, employers who provide employee health benefits to their employees through group health insurance policies (which will typically be small and medium-sized employers) are already providing, or not providing, abortion benefits as part of their employee group health plans, depending on whether their employees are in pro-abortion or anti-abortion states. Such employers are generally unaffected by Dobbs.
An exception to the conclusion expressed in the preceding paragraph that fully insured employer health plans should not be impacted by the Dobbs decision would be in the case of an employer that felt strongly about having abortion benefits available to its employees residing in an anti-abortion state. Because the state in which those employees reside will no longer have any providers offering abortion services, such an employer might consider adding abortion travel or medication abortion benefits to its health benefits plan through a health flexible spending plan account (a “Health FSA”) or through a health reimbursement account integrated with the employer’s group health insurance plan (an “integrated HRA”). Although there are both practical and technical issues under existing IRS regulations with using a Health FSA or integrated HRA to fund abortion benefits as an add-on to an employer’s fully insured group health insurance plan, it is possible that these issues will be addressed by the IRS and the DOL in the wake of the Dobbs decision. However, an employer with a fully insured group health plan that provides abortion benefits through a Health FSA or an integrated HRA will be doing so through what is effectively a self-insured health benefit, and therefore such an employer should carefully consider the issues and risks discussed below in connection with Health FSAs and integrated HRAs (as self-insured health plans) offering abortion benefits to employees in anti-abortion states.
Impact of Dobbs on Self-Insured Health Plans
Dobbs’s impact on employers sponsoring self-insured health plans is more complicated. Obviously, as in the case of employers with fully insured group health plans, coverage by self-insured group health plans of employees in pro-abortion states should not be affected. However, many employers with self-insured health plans currently provide employees in anti-abortion states with abortion benefits. There is a strong argument that ERISA preemption protects such employers (and their directors, officers, and employees involved in plan administration) from civil liability for continuing to provide those abortion benefits post-Dobbs. For example, the much-publicized “Texas Heartbeat Act,” which was enacted by the Texas Legislature in 2021, empowers private citizens to sue a medical practitioner for aborting a fetus after its heartbeat can be detected (which is generally considered to occur at around six weeks of gestation), and also empowers private citizens to sue any person who facilitates such an abortion; however, this Texas law imposes civil liability, and therefore its application to self-insured group health plans in Texas and to the persons administering them are likely preempted by ERISA, although each Texas employer should seek legal advice specific to their facts before relying on the principle of ERISA preemption to protect them from civil liability.
But, the protection afforded to self-insured group health plan sponsors and to individuals involved in plan administration by ERISA’s preemption of state laws imposing civil liability is far from the end of the story. For one thing, ERISA’s preemption shield will not extend to medical professionals and organizations providing abortion services to plan participants. So, after Dobbs employees in anti-abortion states will generally need to travel out of state to obtain abortion services. Moreover, a group health plan that provides abortion benefits in an anti-abortion state after Dobbs should be careful to do so in a way that makes clear that the employer policies and funding that facilitate an employee’s obtaining an abortion are established, administered, and communicated as an integral part of the employer’s ERISA-covered health plan, and not as an employment policy or benefit that is separate from or in addition to the employer’s ERISA-covered health plan. For example, while the inclusion in an employer’s ERISA-covered group health plan of reimbursement of expenses for travel out of state to obtain abortion services should be shielded by ERISA preemption from the application of state civil laws that would penalize facilitating an abortion, an employer’s establishment of a fund outside its health plan to which employees might, for example, donate leave days and/or cash to facilitate other employees’ travel out of state to obtain an abortion likely would not be shielded from civil liability by ERISA preemption if it could not fit the definition of an ERISA-covered benefit plan.
Moreover, even where an employer exercises caution to ensure that abortion benefits are provided under an ERISA-covered self-insured group health plan, Attorneys General and/or activist organizations or individuals in anti-abortion states are likely to aggressively challenge the application of ERISA’s preemption of state civil laws to self-insured health plans offering abortion benefits. Thus, employers who continue to make abortion benefits available under their self-insured group health plans to employees in anti-abortion states should be prepared for the expense, and the impacts on employee and customer relations, of a contentious legal fight.
It should also be noted that in the case of a state law that would impose civil liability on persons who “aid or abet” a woman’s obtaining an abortion, ERISA protection is unlikely to extend to individuals who are not part of the employer’s health plan administration. For example, even if an employer’s provision of abortion benefits through its health plan to an employee residing in an anti-abortion state is determined to be protected by ERISA, such protection is unlikely to extend to a friend or coworker who accompanies the employee on her trip to see an abortion provider in another estate.
No ERISA Preemption of State Criminal Laws of General Application
Probably of greatest concern to employers that continue to offer abortion benefits under their self-insured group health plans to employees in anti-abortion states is that ERISA does not preempt state criminal laws of general application. Thus, employers with self-insured health plans who offer abortion benefits to employees residing in states whose current or future laws treat abortion as homicide and treat assisting an individual to obtain an abortion as aiding or abetting a homicide will want to tread carefully. For example, while the previously discussed Texas Heartbeat Act is clearly a law imposing civil, not criminal, liability, it contains a legislative declaration that Texas’s pre-Roe (i.e., pre-1973) laws prohibiting abortion were never repealed and therefore are again effective now that Roe has been overturned. A careful analysis of all such laws, which of course predate the existence of many modern medical procedures, such as in vitro fertilization, the so-called “morning after” pill, and many methods of birth control, should be undertaken by any Texas employer that wishes to provide abortion benefits to its employees through a self-insured health plan. Note that Texas, like several other states, also has a so-called “trigger law” set to take effect 30 days after the overturn of Roe, but while this law (H.B. 1280, the “Human Life Protection Act of 2021”) imposes criminal as well as civil liability in connection with abortions, it does so only on persons who “perform, induce, or attempt an abortion,” and therefore does not appear to reach an employer sponsoring a group health plan that offers abortion benefits in Texas or any director or employee of such an employer involved in administering the plan’s abortion benefits.
Emerging Issues Under the Constitution and Federal Law
In addition to the protections that may be available to an employer and its employees from ERISA’s preemption of state civil laws in the case of abortion benefits provided under a self-insured health plan, a woman’s right to travel to a state whose laws permit abortion may be protected by the “right to travel” among the various states of the United States, which Supreme Court precedent has long held to be part of the Constitution. Moreover, medication abortions may receive protection under the Federal government’s statutory authority over food and drugs, over the United States Postal Service under Article I, Section 8 of the Constitution, and over telecommunications under the Federal Communications Act. Finally, an anti-abortion state’s attempts to hold persons criminally liable in connection with an act that is legal in the state in which it occurs will present difficult issues under traditional notions of criminal jurisdiction. In all of these cases, the protection provided to an employee to receive abortion services may provide indirect protection to their employer.