It’s too soon to know exactly how health plans are affected by the U.S. Supreme Court’s decision to overturn Roe v. Wade and give states the right to govern abortion, according to industry observers.

“There are a lot of unknowns,” said Lisa R. Nelson, a vice-president at Leavitt Group Enterprises Inc., an insurance brokerage in Cedar City, Utah.

The ambiguity stems, at least in part, from the barrage of lawsuits immediately spawned by the high court’s earth-shaking ruling in Dobbs v. Jackson Women’s Health Organization. The ensuing legal tussles have led, among other things, to the temporary blocking of some states’ so-called trigger laws, designed to ban abortion in the event of a case such as Dobbs. “Things are changing almost daily,” Nelson said.

Despite the lack of finality, advisors can add value to relationships with business owners who sponsor health plans by keeping tabs on the evolving legal landscape.

“Watch state laws. They’re going to apply to the majority of small businesses because of the mechanism by which they fund healthcare benefits,” said Michelle Long, a Kaiser Family Foundation senior policy analyst in Washington, D.C.

Most small enterprises’ health plans are fully insured, she said, meaning the company pays a premium to an insurance company that then assumes responsibility for adjusting claims and paying them. Fully-insured plans fall under the auspices of state law, hence the advice to keep an eye on the statehouse—and the courts, as new statutes will undoubtedly be challenged.

There are exceptions, however. Self-funded, or self-insured, plans are generally not subject to state oversight. They are regulated by ERISA, the Employee Retirement Income Security Act, a federal law that pre-empts state laws affecting health plans. So whether an employer-sponsored health plan must comport with state law hinges on how it’s funded. Large public companies, which most media attention has focused on, typically self-insure; they can afford to pay the claims, at least to the point where their stop-loss coverage begins.

About half-a-dozen states, including California, Illinois and New York, require fully insured plans to offer abortion coverage. More states may join their ranks, Long predicted.

A larger number will likely go the other direction and restrict fully insured plans’ ability to provide abortion-related coverage, something 11 states had done even before the Supreme Court handed down Dobbs. Some may try to prohibit covering the cost to travel for an abortion where it’s legal.

Perhaps the most disquieting issue for business owners is the potential for criminal culpability. “Although states cannot regulate self-funded health plans directly, they may try to criminalize, as Texas did last year, anyone who assists another individual in obtaining an abortion,” said Allison K. Hoffman, a University of Pennsylvania law professor. “The question is whether paying for abortion care under a health plan”—even a self-funded one—“or for travel to receive abortion care would be in violation of a state’s criminal law,” Hoffman said.

But aiding and abetting only applies to an act that is a crime, said Seth J. Chandler, a law professor at the University of Houston. “And at the moment,” Chandler said recently, “it is not a crime in any state to either leave it for the purpose of obtaining an abortion or to pay for someone to travel out of state to have a legal abortion performed there. So I believe that, at least today, an insurer or an employer could provide reimbursement for an out-of-state abortion without exposing themselves to criminal liability.”

There are moves afoot in some jurisdictions to try to criminalize leaving the state for an abortion. However, said Chandler, “there are serious constitutional questions as to the extent to which a state can regulate conduct occurring outside its borders.” In other words, bet on litigation.

Telling It Right
Whatever changes do come to small-employer health plans, owners will need to communicate them to employees in a way that doesn’t turn the company into a microcosm of our divided country. Perspectives among workers probably will differ.

Accordingly, strive for matter-of-factness in employee communiques; eschew opinion, consultants say.  Also, avoid language that stakes out a stance: As an example offered by Nelson, rather than say to staff, “This change will allow employees to exercise their right to an abortion,” employers should tell them, “This change will afford employees continued access to abortive care.”