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Implication of Dobbs v. Jackson Women's Health for Healthcare

As you undoubtedly have seen, last week the Supreme Court overturned Roe v. Wade with its ruling in Dobbs v. Jackson Women’s Health

While this decision has a number of implications, one of the biggest consequences is that the legality of abortion services is now determined at the state level. As such, group health insurance plans will inevitably be impacted given that they are also regulated largely at the state level. 

In the coming days and weeks, we can expect to receive guidance from insurance carriers on how the decision affects the health plans utilized by your employees. Namely has been in constant communication with insurance carriers since a draft Dobbs v. Jackson Women’s Health opinion leaked weeks ago, and we are continuing our efforts to obtain and disseminate the information you need to make important decisions about your company’s health plans. 

Many important and pressing questions remain unanswered, especially regarding how the situs state of health insurance plans impact whether or not abortion services and related expenses may or may not be covered. 

As a reference point, if a plan is sitused in a state where abortion is now illegal, will the plan cover abortion if performed in a state where the procedure is legal? Conversely, if a plan is sitused in a state where abortion is legal but an employee lives in a state where it is now illegal, what costs can still be covered? How does a plan’s fully insured or self-insured status affect the options available to employers?

One of the more common measures being implemented by employers to offset the reduction of access to legal abortions is to provide employer-sponsored travel for medical procedures they could not access in their state of residence, as the IRS has typically regarded this as a qualified medical expense. 

For example, Namely just announced that we will reimburse reasonable travel expenses up to a certain amount for any employee seeking personal access to abortion services where such services are not available within 100 miles of that employee’s home address. However, that does not mean a similar policy is right for you given the potential negative consequences. For example, a travel reimbursement policy could subject an employer to liability in states where assisting individuals in obtaining an abortion is criminalized or subject to private rights of action. 

There’s also a Pandora’s box of legal compliance issues that arise with creating a reimbursement policy that exists outside of your group health plan. We highly recommend that you consult with legal counsel before implementing any such policy due to the quickly-evolving legalities of the issue, as there is a high likelihood that some states will enact legislation that impacts employer-sponsored benefits like these. 

Please know that Namely will continue to obtain and disseminate pertinent information as it relates to your benefit plans and your options moving forward. 

If you have any questions, please do not hesitate to reach out to your benefits consulting team, who has been instructed to loop in leadership if necessary. We fully understand the urgency and sensitivity of this issue and are committed to keeping our clients informed. 

Namely does not provide legal, accounting, or tax advice. Please consult with professional counsel for any tax, accounting or legal questions.

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