Editor’s Note: To access your SHRM credits for listening to this podcast episode, click here. Welcome to This Week in Benefits, a new biweekly podcast from Mployer Advisor, the company that is changing the way employers search, evaluate, and select insurance advisors online.
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Date: June 29, 2022
Episode Season and Number: Season 1, Episode 7
Episode Title: How Does the Supreme Court's Decision to Overturn Roe V. Wade Affect Employers and Health Plans?
In this week's episode, Abbey Dean sits down with Lisa Nelson–the Vice President of Employee Benefits, Compliance & Regulatory Affairs for the Leavitt Group–to discuss what employers should consider in the wake of the Supreme Court's decision to overturn Roe v. Wade.
To listen to the seventh episode of This Week in Benefits, click here.
Lisa Nelson’s Post on Roe v. Wade via The Leavitt Group
These Companies Will Cover Travel Expenses for Employee Abortions via The New York Times
Abbey Dean: Hi everyone, and welcome to this week's episode of This Week in Benefits a podcast from the team at Mployer Advisor, where we discuss all things employee benefits. I'm your host Abbey Dean Mployer Advisor's Head of Content, and thanks as always for being here. Now today, we are going to be examining the implications of some major news that made headlines this past Friday June 24th. That was the Supreme Court's decision to overturn Roe v. Wade. We touched on this topic very briefly in a past episode when the leaked Supreme Court document was first released back in May. You might recall that on that episode, Weller and I discussed many companies' reactions to that news were extending the possibility of offering travel reimbursements for those seeking abortions out of state. So I wanted to follow up with this now that Roe v. Wade has been overturned, and I want to think about what this means for employers.
What should employers be thinking about in light of this decision? How could this impact their current benefits offerings and what complex compliance or other issues does this create as a result? Now, we can't answer the question, all of those questions today, because this news is still very much unfolding, but to help me answer some of those questions, I am joined by Lisa Nelson. She is the Vice President of Employee Benefits and Compliance and Regulatory Affairs for the Leavitt Group without any further ado. Here's my conversation with Lisa.
Hi everyone. I am very excited today. We are joined by Lisa Nelson. This news broke on Friday. Today is Wednesday. This episode is going live today. So we really appreciate that. We were able to get her to talk with us today. So Lisa, thank you so much for being here.
Lisa Nelson: No problem. Happy to help out on this topic.
Abbey Dean: Indeed lots to discuss. So Lisa, would you mind introducing yourself and telling us your title and what you do?
Lisa Nelson: Sure. I'm Lisa Nelson, I'm the Vice President of Compliance and Regulatory Affairs, as well as a corporate HIPAA Privacy Officer here at the Leavitt Group. It is my job to stay on top of the latest in the legislative and regulatory world, as well as covering important legal issues that may affect employer-sponsored plans. So in doing that daily, I read the latest news or changed rules. I synthesize it into more consumable news for brokers, servicing our clients who are on employer-sponsored health and welfare plans. I consult those clients themselves through written articles, meetings, tools, seminars, webinars, which I also develop on a day-to-day basis. So quite busy <laugh>.
Abbey Dean: Indeed. Actually, your first article you wrote about Roe V. Wade is how I found Lisa. So I'll make sure to include that in the show notes for everyone to look at. So again, lots to discuss here, just a couple things happening since Friday. But I kind of want to start a little bit before that. Lisa, what was your first reaction when you heard the news about the leaked Supreme Court ruling that signaled a high probability that Roe v. Wade would be overturned? What was your reaction?
Lisa Nelson: Yeah. So in May, when the draft opinion was leaked, initially I felt really concerned. I felt the need to get out in front of it before the decision was made because at the Leavitt Group, we really take pride in being proactive and not reactive. So I had a sense of urgency to really tell our Leavitt community how to prepare for what looked like an impending outcome that could really shake up not only the right to abortive care in more than half of the states, but an impact on our employer clients, in regards to their health plan coverage, when the decision came out. I was not 100% shocked because of the leak in May. But I was still as a woman very shocked. I actually wrote the article in tears if I'm being completely open.
Abbey Dean: What does this mean for employers nationwide? And what are you thinking about now for your own clients?
Lisa Nelson: Yeah, this decision really created a more complicated patchwork of rules. We're already used to a patchwork of rules for self-funded vs. insured, but now it's really created a lot of variation depending on the state in which the employer's site or located as well as where the employees are located. So in those states that already had restrictions on abortive care. Well, actually the ones that already protected abortive care, like my state in California the employers will just really need to consult with their insurance brokers and consultants as we call them, as well as potentially legal and tax professionals, because there are so many facets that must be considered. Like does my plan cover abortive care? And what happens now, which will require not only reviewing the details of the plan but the state laws as well.
You also have to consider what if my employee wants to travel out of state to receive abortive care, can I pay for it? What are the tax implications? Am I even allowed to facilitate travel over state lines? Because some states like even facilitating is a crime under their new state ban on abortive care, you have to consider, how do I communicate with my staff on this very sensitive issue? There are really just a lot of questions that need to be answered by the consultants, lawyers, and tax professionals that the employers must rely on. So the employees just really need to ensure that they're working with the appropriate professionals with the capability to respond to those difficult questions.
Abbey Dean: Right. And I assume the fact that so many companies now are hybrid, so they may have employees all over the country further complicates this. In addition to what you mentioned about self-funded plans vs. fully insured plans. Sure. Does that sound right?
Lisa Nelson: Right. For sure. Yeah.
Abbey Dean: So back in May, but then also since Friday, we've heard a lot about companies coming out and saying that they would offer reimbursements for travel required to obtain an abortion. What's your reaction to this benefit? And what would that look like logistically for employers to offer because that also sounds like you alluded to before very complicated.
Lisa Nelson: I have a girlfriend who works for Intuit, so I was quite aware very early on of company's approach to the challenge. So I was slightly concerned again. I feared that some of those companies may not have considered all of the implications flowing from the offer to facilitate abortive care with state laws ban not only the legal and criminal implications, but also how the reimbursements being taxed if they need to be, depending on if they're drawing the funds from the plan or an employer fund unrelated to the plan, like a hardship fund or a lifestyle spending account. For example, you have to consider who has offered this, where states have bans, or do they need to also offer reimbursement for travel and states where abortive is legal. Perhaps they are not afforded travel or covering any out OFP pocket costs typically for abortive care.
What is your plan even offer if covering lodging in travel outside of the plan, there's a lot of flexibility, but then, you know, you have to consider if you're offering it within the plan, how does it affect mental health parity, non-quantitative limits that really require that mental health and substance use support substance use disorders, uh, must be offered at the same level, uh, in cost as a medical offering. So if you're offering abortive care with no cost, then obviously that could impact the mental health equity act, which, will require that comparison if you're offering travel and lodging at no cost, that will definitely impact it. So if you're offering within the health plan, like with your HRA or FSA, which is a health reimbursement account or flexible spending account reimbursements for lodging is capped tax-free at $50 a night per IRS publication 502 and 969.
So that won't get you very far. You also have to consider HIPAA, which will require if you're obtaining sensitive information in order to receive that reimbursement, which most of the time is required, then HIPAA's gonna be impacted. You'll have to consider, are you getting those business associated agreements or the HIPAA releases with the appropriate people, people you have to consider, do you need to change your plan documents? Can telehealth cover it, specifically the abortion pill, which in some states are also considering banning access to that pill through telehealth. You have to also consider the pregnancy disability act and other non-discrimination laws. And also the Affordable Care Act mandate to cover contraception in most plans is also being challenged right now. So you have to even start considering the future of contraception under your plan in your state and finally, really, really implore everyone to consider how you're discussing this, be gentle, consider communications on this topics, your clients related entities, be proactive, and gentle. So instead of saying you've lost your right to abortion, saying something like that could really impact some of those entities, clients, or employees. That statement, for example. So there are a lot of logistics to consider.
Abbey Dean: No, I'm glad you raised that last point as well also. Wow. What a list. We don't even know what will be entire, I mean, we don't have a clear idea yet if I understand, what the weeks and months ahead may bring as well. Right? So the world, as we know it today in, in certain states via this ruling may be different next week or next month too, is that correct?
Lisa Nelson: Yeah. We don't really know the reaction yet from the states fully. Some states, for example, like I believe it's Minnesota, which has a Democrat governor who is challenging the state law banning abortion there. So that puts a hold on it in Texas. There's even a hold on the ban on abortion there, which just happened due to new pending litigation. So even in states with bans, there are lawsuits happening that may also pause a ban for a period of time. Then in some states like Oregon, Washington, California, they're working on the opposite to make abortive care a constitutional right for women. So we don't know yet how states will even criminalize facilitation of abortive care. Will they come after employers offering this coverage? So there are a lot of impactful unknowns at this time.
Abbey Dean: One thing I've also seen crop up is that the Supreme Court's ruling can potentially put into question employees access to IVF and other fertility benefits. Is that correct?
Lisa Nelson: Not only that, not only did they open up that possibility, but some states were, are already talking about expanding those restrictions and things like contraception and, and plan B pill. The Affordable Care Act does require covering contraception at no cost except for religious organizations and those entities that are with religious or moral objections, which is really broad. And there's no test there that mandates a religious or moral objection to test, to say that that's valid. And then Supreme Court Justice Clarence Thomas also in his opinion, talked about the future challenges that should happen on many other laws, not just fertility benefits, but same-sex marriage, gender identity rights, etc.
Abbey Dean: Because there's so much happening in so many unknowns. What would you advise employers to do right now?
Lisa Nelson: It is really important that they find if they didn't do not already have a good consultant insurance consultant, your insurance broker consultant, they will be the first place to help you navigate what your current offering is. And then of course, a legal professional and a tax professional around this topic as well. Someone who can look at your state laws and the tax world to determine if you take one approach. What will that look like? Is it legal? How do you tax it? So you definitely talk to your consultants and lawyers.
Abbey Dean: Do you think, given the logistics you've outlined and the sheer complexity of it, do you think, and the sensitive nature of course, do you think these kinds of benefits are something you can imagine employees taking advantage of. Do you think it is more in an effort for the company to align themselves with their workforce?
Lisa Nelson: It's my impression initially that the companies, and this is really large companies, that they are doing this, like 2000 plus, they can afford to it. They really were looking to make a statement to their employees, to everyone actually out there that they had a moral position on this topic that led them to offer that benefit. I do believe that in the states that where there is a ban that there will be women taking advantage of that. It's just what happens with the benefit. So if they are offering it through their health plan, there are limitations, severe limitations on what they can offer. Pre-tax so they, like I said earlier, that $50 limitation on lodging, the internal revenue code 2 13 allows covering travel and lodging, but only up to that $50 limit for lodging. No meals are even covered.
Yeah, I do believe that it's aligning with the company values and making a statement more than anything. At the same time, I don't want to take away the fact that women will likely take advantage of this benefit. It's just whether or not it would be worth it if there are taxes or limitations on that benefit. So, for example, if they have to be taxed on the benefit, because they're offering it outside of the health plan, then is that taxation prohibitive to the woman seeking that care. If a limitation on lodging is $50 a day, is that such a limitation that the woman wouldn't want to take advantage of that? I think any money is good money, really. You really need this care out of state. I think they would, and they really want it right then I believe they'll take advantage even if there are limitations.
Abbey Dean: Is there anything else that we haven't discussed yet that you think is really important to mention surrounding this topic?
Lisa Nelson: I want to talk about the difference between insured plans and self-funded plans. Insured plans will be most active because they're governed by the state in which that policy is written. So if it's written in a state that now bans abortive care, that plan will need to automatically be modified. And then the employer wants to consider if they want to provide other resources. Because in that state, for example, if you, your legal team said that there is a criminal charge for facilitation, then even if they're offering it outside of the fully insured plan, like a fund, like you mentioned a four, $10,000 fund, then they're gonna have to consider the legal and tax implications as well. Is it criminalized in that state? Like it is in Texas vs. for self-funded plans, which are not governed by state law. They are afforded the opportunity to continue offering their plan, even in states where there could be a ban because those self-funded plans are or govern by federal law.
And ERISA preempts state law from applying to them. But even in those states, in those plans, even in those self-funded plans. They could still be criminalized for a facilitation of abortive care. So that is where you really need to talk to your legal counsel about whether or not that's advisable based on the law in that state. But we also don't know how those states are going to treat that criminalization of facilitation, because we don't know yet if they're actually going to come after the employer for such a fund. Then you have to consider the Hyde Amendment, which is a federal law that bans using federal funds for abortive care. And this will impact any employees on Medicaid or Medicare for disabilities, and even the Affordable Care Act marketplace exchanges in the states that had banned abortive care. So even the Hyde Amendment for Medicare recipients isn't going to prohibit Medicaid recipients from receiving abortive care in states that allow abortive care, like in California, they actually use state Medicaid funds to pay for abortive care where federal law would not. So it really will vary on your state. So it's super important to have a lawyer, an insurance consultant, and tax professional to help you navigate all of those rules and those considerations.
Abbey Dean: Are there any other resources that you would like us to link in the show notes that you think would be helpful for all of our listeners out there?
Lisa Nelson: I think it's important to sign up for alerts in general, that's what I do. You could also go to news.leavitt.com for example. I always link in my articles to the court case or the rule. I'd also encourage you to register for any alert from your specific state department of insurance that will send you the specific news on insurance in your state. They will be telling everyone what employers in that state, those fully insured plans can and cannot do. There is also a lot of alerts in this legislative federal world, the department of health and human services, and the IRS as well. You can get alerts from them, and they'll send some really important information out on all of the relevant news impacting you as well as other rules. It would be a good idea to register with those alerts, and then be proactive and gentle, not alarmist, but proactive.
Abbey Dean: Those are wonderful pieces of advice and resources. Lisa, thank you so very, very much for being so generous with both your time and your expertise. Thank you.
Lisa Nelson: You're welcome.
Abbey Dean: Well, that wraps up today's episode. Thanks so much for everyone for tuning in, and of course, to Lisa for lending her expertise. Now, if you have not yet, please subscribe to the podcast and leave us a review. You even have the option to leave us a voicemail message. If you feel so inclined, you can suggest ideas, pose follow-up questions, or even ideas for future episodes. Be sure to check out the show notes for any of the stories we mentioned above. And thanks for listening. I will see you next time.
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