Contributors: Samantha Dalmass and Alison Rosenblum
To learn more about Samantha and Alison, click here.
On June 24, 2022 the Supreme Court officially issued its ruling in Dobbs v. Jackson Women’s Health Organization, upholding Mississippi’s Gestational Age Act, which prohibits abortion after the fifteenth week of pregnancy. In doing so, the Court overturned the longstanding precedent set forth in Roe v. Wade, and Planned Parenthood of Southeastern Pa. v. Casey, which had established a constitutional right to abortion. In holding that the U.S. Constitution does not confer a right to abortion, the Supreme Court gave states the authority to set laws greatly restricting and even prohibiting abortion, opening the door to a new legal and regulatory landscape that companies must learn to navigate.
Aside from critical issues for individuals seeking reproductive healthcare services in certain states, the overturn of Roe and Casey has already had, and will continue to have, significant implications for companies and employers nationwide. This is true regardless of industry, but especially so for healthcare-related companies. As healthcare systems and providers attempt to navigate this new patchwork of state and federal laws and regulations governing reproductive health services, complicated by the fact that state and federal guidance conflicts in many circumstances, they also face complex issues related to professional medical judgment, clinical standards, licensing requirements, and ongoing compliance with various other requirements imposed on healthcare providers. These issues include those related to medical tourism, professional licensing, reimbursement, telehealth, and electronic prescribing, to name a few, as well as concerns over patient privacy arising under the federal Health Insurance Portability and Accountability Act (“HIPAA”) and state privacy laws.
With regard to compliance with federal privacy laws, the U.S. Department of Health and Human Services (“HHS”) issued guidance in the immediate aftermath of the Dobbs decision, attempting to clarify how patient privacy is protected under HIPAA in the context of reproductive healthcare. The guidance, issued by the HHS Office for Civil Rights on June 29, 2022, clarified that protected health information (“PHI”) may only be used or disclosed as expressly permitted or required by HIPAA, such as when the disclosure is required by law or for law enforcement purposes. A number of states have responded by issuing executive orders or passing new legislation offering additional protections for such PHI. HHS has also issued guidance to hospitals, reminding them of the obligation to provide stabilizing treatment under the Emergency Medical Treatment and Labor Act (“EMTALA”), which HHS explained could include abortion even where limited or prohibited by state law.
In addition to the various healthcare-specific issues mentioned above, the industry must also deal with other major issues all companies and employers are facing in the wake of Dobbs. While this decision has already had broader implications than many anticipated, companies and employers in all industries have been struggling to grasp one concern in particular: employer coverage of abortion-related benefits. In May, when the draft decision was leaked, a number of large companies and major employers issued statements promising to enhance reproductive health benefits for their employees, and the list of companies promising coverage for abortions has only continued to grow.
As roughly half the states take measures to restrict abortion (including some nearly banning abortion) and some states, such as Texas and Oklahoma, implement laws allowing individuals to file civil actions against individuals and entities that knowingly engage in conduct that aids or abets the performance or receipt of an abortion, employers may be forced to reconsider how best to provide reproductive health benefits to their employees. Although state regulation of abortion varied widely prior to Dobbs, including how far into a pregnancy an abortion could be provided and the extent to which employers could cover abortion services through different types of employee benefit plans, it was generally accepted that employers could offer coverage for reproductive health services, including for abortions and services provided across state lines, under a fully-insured group health plan.
However, as certain states pursue measures intended to prevent employers from paying for or reimbursing abortion services, the ability to continue providing these benefits through fully-insured plans may not be as immune to challenge as once thought. This is because employers offering fully-insured plans provide benefits through insurance contracts or policies subject to the insurance laws of the states in which the plans are administered. Thus, for those companies that want to minimize potential civil and criminal liability while providing coverage of reproductive health services, fully-insured plans may not be the best option post-Dobbs. Instead, companies seeking to reduce potential liability under state law may want to consider providing abortion coverage or reproductive health services benefits through a self-insured plan, where the employer pays for benefits from its general receipts rather than purchasing insurance plans from state-regulated insurance companies. Self-funded plans, in contrast, are generally subject to the federal Employee Retirement Income Security Act (“ERISA”), which preempts many aspects of state laws governing employee benefits plans. Employers seeking to minimize liability may also need to consider structuring benefits to cover expenses incurred in obtaining out-of-state treatment for any medical services that cannot be obtained in-state, rather than making such coverage specific to abortion.
As the country continues to grapple with the overwhelmingly broad implications of the Supreme Court’s decision in Dobbs, new issues and questions are certain to arise for employers and companies with offices or employees in both abortion-restrictive states and states continuing to protect abortion access. Companies will need to examine closely how they structure their employee benefits related to abortion and reproductive healthcare, including the potential enhancement of telehealth benefits and coverage of travel, lodging, and healthcare expenses for employees obtaining abortion and other healthcare services out-of-state. HIPAA-covered employers and healthcare providers will also need to follow state and federal legal developments related to patient privacy, while providers will also need to consider issues including emergency care, telehealth, and treatment of out-of-state patients, to name a few. As new legal issues and complications continue to arise, employee benefits and coverage for abortion services will remain a challenging topic under an increasingly inconsistent legal landscape.
Contact Samantha at: [email protected]
Contact Alison at: [email protected]
Disclaimer: This article has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice.