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Elective Abortion Insurance “Opt-Out” Act’s Impact on School Districts
Many school districts were recently notified by their health insurance providers of the need to opt in or out of “elective” abortion coverage. These notices were sent by health insurance providers pursuant to Michigan’s Abortion Insurance Opt-Out Act, PA 182 of 2013, which became effective March 14, 2014 (the “Act”).
The term “elective” abortion coverage is broadly defined in the Act to mean “the intentional use of an instrument, drug, or other substance or device to terminate a woman’s pregnancy for a purpose other than to increase the probability of a live birth, to preserve the life or health of the child after live birth, or to remove a fetus that has died as a result of natural causes, accidental trauma, or a criminal assault on the pregnant woman.”
The Act narrowly defines a few exceptions to this broad definition: (1) the use of drugs or a device as a contraceptive; (2) terminating a pregnancy to avoid the mother’s death; and (3) treatment upon a woman experiencing a miscarriage or diagnosed with an ectopic pregnancy.
The Act prohibits insurers from providing coverage for elective abortions unless supplemental abortion coverage is purchased through an optional rider as provided in the Act. An employer may purchase an optional rider to provide coverage for elective abortion only if the employer provides notice to each employee that: (1) elective abortion will be included as a rider on his or her health coverage; and (2) the coverage may be used by a covered dependent without notice to the employee. Under the Act, an individual, health facility, or agency is prohibited from seeking or accepting reimbursement from a health insurance provider for any services provided that are directly related to the performance of an elective abortion unless the reimbursement is from an optional rider under the Act. An individual, health care facility or agency may be fined $10,000 per violation of the Act.
While the Act speaks in terms of an “optional” rider, school officials should keep in mind, with respect to employees covered by collective bargaining agreements, that Section 15(3)(a) of the Public Employment Relations Act (“PERA”) defines as a mandatory subject of bargaining a type or a level of benefit, policy specification, or coverage for employee group insurance. Therefore, public school officials are prohibited from making a unilateral change or unilateral proposed change in a type or level of benefit, policy specification, or coverage for any employee group insurance plan without bargaining.
If the health insurance coverage that a school district was providing when the Act took effect included elective abortion coverage, then the failure to maintain that benefit level may constitute an unfair labor practice. Should a school district unilaterally opt out of elective abortion coverage and an unfair labor practice charge is successful, the school district could be required to reimburse all out-of-pocket expenses associated with the loss of the benefit. As a result, the school district could be required to pay an insured employee’s expenses for an elective abortion performed during the period for which coverage had lapsed.
While the duty to bargain benefit levels under PERA does not apply to non-union employees, school officials nonetheless must review the terms of all applicable employment contracts and board policies before unilaterally altering existing coverage.
The Patient Protection and Affordable Care Act (the “PPACA”) places additional requirements on employers opting into or out of elective abortion coverage. Federal regulations enforcing the PPACA require 60-days’ advance written notice to employees of any mid-term material modification to the originally issued health plan. Because the 60-day notice requirement applies only to mid-year changes, it does not affect changes made in connection with a renewal or reissuance. In light of PERA’s requirement to maintain existing coverage for union employees, this notice would apply only if a district determined to discontinue existing elective abortion coverage for non-union employees, assuming that doing so would not violate an employment contract or school district policy.
The impact of the Abortion Insurance Opt-Out Act will turn upon the particular circumstances in each school district. School officials are encouraged to carefully review existing insurance policy specifications, district policy language, collective bargaining language, and individual employment contract language.