The landmark Dobbs decision handed down by the U.S. Supreme Court in late June 2022 could go down in history as one of the most important court decisions of our lifetime. The ruling upended a previous ruling with 50 years of history behind it. In so doing, it also triggered a ripple effect that will ultimately impact group health insurance plans.
In reaching its decision on Dobbs, the Supreme Court concluded that the earlier court erred in recognizing the constitutional right to abortion. The current court determined that no such constitutional provision exists. Under the ruling, states now regulate abortion as they see fit.
What does this mean to group health insurance plans? According to the experts at BenefitMall, a lot of things.
Insurance Subject to State Regulations
The biggest impact on group health insurance is that Dobbs forces carriers to craft their policies according to state regulations. For example, BenefitMall points out Kentucky as being one of the states with trigger laws in place. Their trigger law made abortion illegal the minute the Supreme Court decision was handed down. It is quite likely that carriers will no longer be offering abortion coverage in Kentucky.
There may be ways to still provide some measure of coverage in states with tight restrictions. One example is providing travel benefits to customers who decide to travel out of state to access abortion procedures.
Potential Liability Risks
In addition to travel benefits, there are other things that insurance carriers can do to assist customers. But again, everything is up to state regulation. There are some states that, moving forward, will not allow companies to aid or abet abortion. In such cases, insurance carriers would be facing liability risks by providing travel benefits.
Self-Funded Insurance Plans
Fully insured group health insurance plans may still be able to provide abortion coverage to customers living in states that prohibit abortion, if their network of providers includes those in neighboring states without abortion restrictions. Carriers would have to consult their lawyers to figure out just how to go about doing it.
Self-funded plans can be tailored much more easily to state-by-state restrictions. For example, employers with operations in multiple states may be able to offer abortion coverage in one state but not another. They would be free to do with their plans as they saw fit. They just couldn’t provide coverage in states where abortion is restricted.
There Is No Simple Solution
The Dobbs ruling is still new enough that insurance carriers have not worked out all the details of their coverage. What we can say is there is no simple solution right now. Regulating abortion at the state level creates hurdles for insurance carriers, general agencies, and even brokers. It is going to take a while to overcome those hurdles.
In the meantime, carriers need to tread extremely lightly. Rushing into things is an open invitation to legal trouble. Along those lines, insurance carriers should also prepare for litigation. There are going to be cases that test the boundaries of state law, cases that will ultimately determine the fate of abortion coverage in the U.S.
As for employers and brokers, they should not see many changes in states where abortion has been made legal. In other states, it is a different story. Brokers and employers will have to navigate the regulations in their respective states and then present the information to employees.
The Dobbs decision did more than turn abortion regulation over to the states. It turned a 50-year-old system completely on its head. It is going to take a while before all of the implications are sorted out.