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How the Supreme Court ruling could affect insurance coverage for abortions

By Tami Luhby, CNN

Though a growing number of companies are offering to help workers travel to states where abortion is legal, it remains uncertain whether employers and insurers will have to pull back on providing abortion coverage to residents of states where the procedure is or will soon be banned.

Now that the Supreme Court has overturned Roe v. Wade, much will rest on what laws states put in place — particularly those governing their residents’ ability to obtain abortions in other states and to be prescribed medication abortions, experts say.

“It would depend upon the legal language,” said Doniella Pliss, a director on the health insurance ratings team at AM Best, a credit rating agency. “For an insurance company, that is not an ideological issue. … They will go strictly by what the law is.”

Another important element is whether employers offer self-insured coverage, which is governed by federal regulation, or fully insured policies, which must comply with state rules. In the former, companies pay their workers’ health care costs, while in the latter, they contract with state-licensed insurers to cover the claims. Many large employers are self-insured.

Current rules

Health insurance coverage of abortion has long faced many limitations.

Some 34 states and the District of Columbia allow Medicaid to cover abortions only in cases of rape, incest or endangerment of the woman’s life because of the Hyde Amendment, which restricts federal funding of the procedure, according to the Kaiser Family Foundation. The remaining 16 states use their own money to provide broader Medicaid coverage of abortion.

Some 26 states prohibit policies sold on their Affordable Care Act exchanges from covering abortion, with certain exceptions.

When it comes to job-based plans, 11 states have laws that bar abortion benefits, with certain exceptions, in small business and large employer policies that the states regulate. Some states may allow abortion coverage to be purchased as a rider, according to Kaiser.

Seven states have laws that require all of their fully insured employer plans, as well as Obamacare and other individual market policies, to provide abortion benefits.

The federal law that regulates self-insured plans, the Employee Retirement Income Security Act of 1974, known as ERISA, does not contain any abortion coverage limitations or requirements.

But the federal Pregnancy Discrimination Act requires all employers that offer health insurance and have 15 or more workers to cover abortion if the woman’s life is at risk.

Fallout from the Supreme Court decision

About 10 states have effectively banned abortion since Friday’s Supreme Court ruling. And 26 states are certain or likely to prohibit the procedure, according to the Guttmacher Institute, a research and policy organization that supports abortion rights.

No state currently bars its residents from obtaining abortions in other states where it is legal. But Republican lawmakers in Missouri have tried to include it in legislation — unsuccessfully, so far. Other states may follow suit, experts say.

The liberal Supreme Court justices warned of this potential in their dissent, though Justice Brett Kavanaugh tried to tamp down those worries in his concurring opinion, saying states can’t bar their residents from traveling elsewhere for abortions.

Also of potential concern to insurers and employers are state laws that could hold liable those who aid and abet an abortion — which is a provision in the Texas abortion law that was passed last year. This could potentially affect abortion coverage across state lines.

“Is coverage considered aiding?” said Alina Salganicoff, Kaiser’s director of women’s health policy. “Insurers are really going to have to look at that.”

Many insurers and employers will be “cautious,” she said. “There’s a lot of activity right now, trying to figure this out.”

Already, Citigroup and Lyft have drawn the ire of some GOP lawmakers in Texas for providing travel benefits for abortion procedures. One Republican state representative in Texas said earlier this year that he will introduce legislation barring local governments from doing business with any company that provides abortion coverage or pays abortion-related expenses.

It’s also possible that ERISA would not preempt certain state laws, such as criminal laws.

Another question will be whether states can bar coverage of medication abortions for their residents in self-insured employer plans, said Katy Johnson, senior counsel for health policy at the American Benefits Council, a trade association for primarily large employers.

“This is really a novel situation here,” she said, noting that many of the council’s members offer abortion benefits. “Seems like nothing’s off the table.”

So far, Johnson has not heard of any employers pulling back on their abortion coverage, including across state lines. And a slew of companies have already declared that they will pay for out-of-state abortions and travel services.

But that doesn’t mean they won’t face blowback in states that are banning the procedure.

“I would expect some states to take some pretty broad interpretations of the kind of behavior that their own laws cover,” Johnson said.

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