Is Special Insurance For Abortion Travel Coming?

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Is Special Insurance For Abortion Travel Coming? It Might Assure Funding Despite Restrictive State Laws

Special Insurance For Abortion Travel

WASHINGTON, D.C. (July 5, 2022) – While the loss of constitutional protection for abortions has raised many insurance-related questions which are now being actively explored, one issue which so far seems not to be under discussion is whether there is sufficient need for insurance policies to provide funding for out-of-state abortions to women who live and/or work in states where such procedures are severely restricted if not outlawed.

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This could come up in at least two common situations - business corporations and institutions of higher education - suggests public interest law professor John Banzhaf.

First, many businesses have already pledged to cover - for employees in states where abortions are restricted - the transportation and other expenses to travel to a nearby state for the procedure. Indeed, some see access to reproductive health care as another health-care employment benefit, akin to dental expenses or egg-freezing coverage.

But since the corporation is doing business in the abortion-restricting state and has employees there, legislators in some situations may be able to prevent any such payments, and/or punish the in-state corporation for aiding and abetting an abortion, even if the procedure itself occurs in another state where it is legal.

This may not be a major concern for many large corporations which have self-insured ERISA [Employment Retirement Income Security Act] health plans - i.e., those where the employer itself covers the costs of providing health-care benefits to its workers directly - since ERISA in many situations preempts state law.

However, this federal statute doesn't offer protection regarding violations of criminal law. Thus an employer with a self-insured plan might still be concerned about prosecution if its benefits involved something which is regarded as criminal. In any event, at this stage, things are far from crystal clear, so litigation is possible if not likely.

On the other hand, the types of plans favored by smaller companies - i.e., fully insured group health plans where the employer purchases its employees' health insurance through a state-regulated commercial insurance carrier - are likely to be covered by state law, and therefore present legal and other problems for companies which try to offer such an abortion benefit, suggests Banzhaf.

This could occur even if the employer did not explicitly single out abortions, but rather simply provided that the plan would cover medical travel for care not available near an employee's home.

Abortion Coverage Prohibited

It appears that only 11 states now prohibit abortion coverage from being included in fully-funded private insurance policies. So at this time there are some states that ban abortions, but do not yet ban coverage for it, but this is likely to change soon, notes Banzhaf.

Some have suggested another workaround for fully-insured plans which don't cover abortion-related travel expenses. An integrated health insurance reimbursement arrangement [HRA] is an employer-funded group health insurance plan which is used to reimburse employees in the company's group medical insurance plan for qualifying expenses not paid by the traditional plan. Similar benefits might even be provided in some instances through a health flexible spending account [health FSA]; or a health savings account [HSA].

Second, there is already talk and speculation that many women will be reluctant to attend a college or university in an abortion-restricting state since they may not be able to obtain the procedure should it become necessary. This seems to be true even for young women who don't necessarily plan to be sexually active and/or do plan to use protection while away from home, as well as parents who may not be so trusting.

Institutions of higher education would obviously be reluctant to lose the financial and other opportunities to have such women enrolled. Moreover, if there were to occur a significant decline in the number of females studying at any institution, male students may likewise be reluctant to apply since many young men would hope and expect the number of females in their schools to be roughly the same as the number of males.

In such situations, since the college or university is physically located in an abortion-restricting state, the state probably will prohibit both private and public colleges and universities from aiding and abetting their students in obtaining an abortion in another state.

One way to overcome these twin problems might be for an insurance company located in an abortion-supportive state, such as New York or California, to begin offering policies designed to provide funding should the insured in any abortion-restricting state find it necessary to travel to a neighboring state for an abortion.

Since the insurance company would be located beyond the borders of the abortion-restricting state, that state's restrictive laws probably would not apply. In any event. authorities in Texas or Florida, for example, would hardly be able to impose penalties on an insurance company located in New York or California.

While probably not completely impossible, it would be much harder for an abortion-restricting state to crack down on companies, colleges, or universities doing business within its borders that simply provide funding for such insurance - which might or might not ever be used by any particular employee.

That's because, without knowing the name of any woman who received payment for an out-of-state abortion from an insurance company in an abortion-supportive state, it would be hard to prove that payment of the insurance premiums actually aided or abetted any specifically prohibited abortion.

It would also be illegal, because of the First Amendment, for an abortion-restricting state to seek to prohibit or punish a company, college, or university simply because it advised the availability of such insurance, argues Banzhaf, a noted First Amendment scholar.

In short, the Supreme Court's recent decision, as well as the various laws, court stays, and other developments which continue to occur, have created lots of uncertainties, including possible opportunities for one or more insurance companies, especially if they wish to actively support abortion rights though their policies, as well as take advantage of what might seem to be a new lucrative business opportunity, suggests the law professor.