“Just like your employer doesn’t know if you’re seeing a doctor for some other medical condition, they wouldn’t know you’re being reimbursed for travel to seek an abortion in a state where it’s legal,” said Harvey Cotton , who advises employers on benefits administration as a principal at the law firm Ropes & Grey. “That’s why having this benefit work through the medical plan is so important.”
The Health Insurance Portability and Accountability Act of 1996, known as HIPAA, protects the privacy of patients’ medical activity, whether it’s care or travel, Cotton said.
The dating app company Match, for example, offers a travel allowance for reproductive care that may not be available in the employee’s home state. The program is administered through her health insurance plans, which she says are confidential.
“Match Group’s reproductive benefits are structured through third parties to ensure employee privacy and confidentiality,” a fact sheet said, noting that any care and support services an employee seeks , are never shared with the company.
Similarly, Yelp, the crowdsourcing platform for reviews, said it would not have access to employee travel reimbursement records related to abortions.
“The privacy of our employees was critical to how we would roll out this benefit, which, as noted above, is administered through our health insurance provider, which further ensures privacy,” a CNN spokesperson said in an email. “Yelp will never receive any information about who has incurred a claim and/or received a refund.”
But there are other ways to set up the travel advantage. One in particular—a taxable reimbursement program—may raise questions about how employers audit expenses while preserving worker privacy.
Provision of travel reimbursement
A number of large employers have recently announced that they will pay for their workers to travel to providers where abortions are legal.
A first-trimester procedural abortion typically costs $575 in 2020, according to a recent study by researchers at the University of California, San Francisco. But pregnant women in states where abortion is or will soon be banned may have to spend hundreds or even thousands of dollars to travel to states where abortion is allowed. In addition to Match ( MTCH ) and Yelp ( YELP ), the list of companies covering abortion travel expenses includes Microsoft ( MSFT ), Kroger ( KR ), Starbucks ( SBUX ), JPMorgan Chase ( JPM ), Netflix ( NFLX ) and Levi Strauss (LEVI), among others.
About 11 percent of companies already implement travel and lodging benefits for abortions, and 23 percent are considering doing so given changes in state laws that are still evolving, according to a Mercer survey that has been underway since early June.
Larger corporations are more likely to offer such a benefit because they are self-insured, meaning they pay their workers’ claims and hire a third-party administrator, usually an insurer, to manage the health plan. Self-insured plans are subject to federal regulations that do not limit abortion care. But many smaller and medium-sized firms have fully insured plans that are subject to state oversight and would have a harder time providing abortion benefits or travel reimbursement in states where the procedure is prohibited.
How a recovery plan can work
There are several ways that companies can create these programs, although most often it is expected to be through existing health insurance plans. Some employers already cover workers’ travel expenses if they need certain medical care, such as heart procedures, orthopedic surgery or cancer treatment.
Insurers typically have or will establish forms and processes that allow workers to request reimbursement for travel, lodging, and other covered expenses related to performing an abortion and submit receipts. It could be similar to how workers file claims with out-of-network doctors and are then reimbursed, said Julie Campbell, a director in Mercer’s health and benefits practice.
Some companies are looking to set up these reimbursement programs in the coming weeks or months, experts say.
Other ways employers can cover travel expenses are through health reimbursement agreements known as HRAs, through employee assistance programs or EAPs, or as taxable reimbursement.
For example, employers can turn to HRA if the insurer they work with can’t add a mid-year reimbursement program, or they can choose EAP if they want to cover a wider range of employees, not just those covered by the company’s health plan, said Jonathan Zimmerman, a partner at Morgan Lewis and co-leader of the law firm’s reproductive rights task force.
Both options are subject to HIPAA privacy rules, but can be more complicated to set up and come with more restrictions. For example, the maximum HRA reimbursement this year is $1,800. Additionally, not all providers who administer HRAs and EAPs can or will agree to quickly establish an abortion travel reimbursement program.
However, providing the benefit as a taxable refund can be more difficult for companies to manage, depending on how it is set up. May not be subject to HIPAA. And companies may have to balance the need to substantiate travel claims with employees’ desire for privacy.
What to watch out for
Employees looking to access their corporate travel benefits should read the fine print before assuming all their expenses will be paid.
Workers may have to meet their deductibles before they can be reimbursed for abortion-related travel expenses, especially if they are in high-deductible health insurance plans.
Some companies may also say that the travel benefit is only available to those who do not have access to abortion services within 50 or 100 miles of their home. Some may require workers to travel to the nearest state to receive care, while others may give workers the flexibility to go where they can get appointments as soon as possible.
Also, while companies can reimburse reasonable airfare without tax consequences, the IRS limits hotel charges to $50 per night for a patient and another $50 per night for a companion if needed, for a total of $100 per night. So some employers may limit accommodation coverage to avoid additional tax headaches.
For those who drive to other states, employers can require them to provide gas receipts or reimburse them at a flat rate of 22 cents per mile, which is the 2022 rate set by the IRS.
And workers will need to check whether the out-of-state providers they see will be considered in-network or out-of-network. The latter can be much more expensive.
However, some employees may still struggle to cover the cost of going out of state for the procedure, as they may not be reimbursed for weeks. This is especially true for low-wage workers.
“The recovery mechanism will only work for people who can come up with that money,” said Alina Salganikov, director of women’s health policy at the Kaiser Family Foundation. “If you don’t have a credit card, if you don’t have enough money saved up for your employer to say, ‘We’ll pay you back for this,’ you have to borrow money from somewhere to get that money to do this.”
Can countries get involved?
What remains to be seen is whether state law enforcement officials can win abortion-related travel claims if that state passes legislation that tries to limit the reproductive care its residents can get outside its borders.
There are certain exceptions under HIPAA related to law enforcement that could allow government agencies to obtain health records, said Zvia Feuertag, a partner in the workers’ compensation practice group at the law firm Epstein Becker & Green.
But some other states where abortion remains legal have passed legislation to limit access to medical information and to bar courts and law enforcement from cooperating in abortion cases within their borders.
Additionally, the U.S. Department of Health and Human Services’ Office for Civil Rights last week released guidance that says protected health information can only be shared with law enforcement and without the patient’s permission “only in narrow circumstances tailored to protect the privacy of the individual.” and support its access to health care, including abortion care.”
“So much of it is unknown at this point and varies from state to state,” said Kathryn Marshall, director of the law and policy group at Mercer, a welfare consulting firm.
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