Supreme Court’s Abortion Ruling Indirectly Impacts Employee Benefit Plans

The U.S. Supreme Court has rejected a challenge to the constitutionality of Mississippi’s Gestational Age Act, which prohibits performing or inducing an abortion after 15 weeks of pregnancy (as determined by probable gestational age) except in limited circumstances. Previously, a federal trial court and the Fifth Circuit appellate court had each ruled that the law was unenforceable based on the Court’s precedents establishing a constitutional right to abortion up to the point of fetal viability (primarily Roe v. Wade, 410 U.S. 113 (1973) and Planned Parenthood of Southeastern Penn. v. Casey, 505 U.S. 833 (1992)). The Court’s decision expressly overrules Roe and Casey, concluding that the Constitution “does not prohibit the citizens of each State from regulating or prohibiting abortion.” Explaining that, absent a fundamental constitutional right to abortion, abortion laws are analyzed like other state laws governing health and welfare and must be sustained if there is a rational basis on which the legislature could have thought that the law would serve legitimate state interests, the Court held that the Mississippi law met that test.

EBIA Comment: As a result of this ruling, many states’ laws (some of which have already taken effect) will prohibit abortion or impose greater restrictions than were permissible under Roe and Casey. This may raise a variety of issues for employee benefit plan sponsors. For instance, it is widely reported that employers have expressed an intent to assist employees in accessing abortion services, such as by covering employees’ expenses if they need to travel for an abortion. Among other considerations, these employers will need to weigh the effect of state laws that may seek to impose civil or criminal sanctions on anyone—including residents of another state—assisting an individual in obtaining an abortion. Furthermore, employers will have to consider whether to provide such benefits on a tax-favored basis (which limits the type and amount of expenses that may be covered) and whether to use an existing plan or establish a separate arrangement. Each approach will raise different considerations, including compliance with otherwise applicable group health plan requirements; the need to amend existing plan terms, related insurance or administrative services contracts, and employee communications; and whether a separate arrangement would create a new plan independently subject to ERISA and other rules. Broader issues also loom for health plan benefits, such as whether existing coverages remain in compliance and whether any proposed changes comply with, for example, HIPAA (and other federal privacy laws) and mental health parity requirements (if travel benefits are provided for this medical procedure but not for mental health treatment), as well as potential preemption of the various state laws by ERISA or other federal laws. Employers should seek the advice of experienced employee benefits counsel as they consider their options. For more information on the underlying employee benefits issues, see EBIA’s Cafeteria Plans manual at Sections XX.D (“Expenses Reimbursed Must Be for Medical Care”) and XX.L.8 (“Travel Expenses: Transportation, Meals, and Lodging”), EBIA’s ERISA Compliance manual at Sections VI (“What Workplace Fringe Benefits Are Subject to ERISA?”) and XXXIX (“ERISA Preemption of State Laws”), EBIA’s Group Health Plan Mandates manual at Sections IX (“Mental Health Parity”) and XXI.F (“Plan Coverage of Abortion Under Title VII, as Amended by the PDA”), EBIA’s Health Care Reform manual at Section V.F (“Excepted Benefits: Certain Health FSAs, Dental, Vision, and Others”), EBIA’s HIPAA Portability, Privacy & Security manual at Sections XXII (“Privacy, Security, and EDI: What Information Is Protected and Which Entities Must Comply?”) and XXIII (“How the Privacy and Security Rules Affect Group Health Plans and Plan Sponsors”), and EBIA’s Self-Insured Health Plans manual at Section XI (“Designing Benefit Options in a Self-Insured Health Plan”).

Contributing Editors: EBIA Staff.