New York state lawmakers took major steps this spring to ensure abortion access, as the U.S. Supreme Court struck down protections at the federal level — including a strengthened requirement that health insurance plans pay for the procedure without shifting any costs to patients.

But some residents are now learning those reproductive benefits may not be covered if their employer is headquartered out of state — or if their health plan falls under federal jurisdiction rather than New York's rules. These exceptions are coming into focus for some as abortion access faces greater uncertainty in a post-Roe v. Wade world and as reproductive health benefits gain more influence over people’s employment decisions. The rise of remote work further complicates the benefits landscape.

While recently examining her employee health plan, Rachael, a nonprofit worker living in Brooklyn, noticed her plan explicitly states abortions are not covered, except in extreme circumstances — such as an ectopic pregnancy, in which a fertilized egg grows outside of the uterus, or a situation that “places the woman in danger of death or a serious risk of substantial impairment of a major bodily function.”

“How can I be living in Brooklyn and have health insurance that doesn't cover an abortion unless the life of the mother is at risk?” Rachael wondered. “I would have never expected that to be something that I would deal with in New York City.”

Rachael asked that her last name and the name of her employer be withheld for fear of professional consequences.

Despite the state’s efforts to ensure that abortion is included in regular insurance coverage, not all New Yorkers benefit. Some are enrolled in health plans that are not regulated by state law, and coverage under those plans can vary.

That includes the so-called “self-insured” plans provided by many large employers. About 60% of New Yorkers who are insured through the private sector are enrolled in those types of plans, which are subject to federal rather than state regulations.

Rachael’s case is different, though. She works for a small nonprofit that is based in New York City but outsources the administration of its benefits to a company called Insperity, which is based in Texas.

On its website, the company advertises its ability to help small employers get a better deal on health insurance by becoming a “co-employer” — an arrangement in which Insperity essentially adopts an organization’s employees as its own. Rachael says that’s the arrangement Insperity has with her organization.

The Empire State is one of only eight that require private health plans to cover abortions.

The health plan Insperity secured for Rachael and her colleagues is provided through the national insurance giant United Healthcare. Even though United offers health plans in New York, where Rachael’s nonprofit is located, this particular plan indicates that it was instead issued in Texas, where Insperity is based.

A company with employees in multiple states can purchase coverage outside of New York that isn’t subject to state rules, according to the New York Department of Financial Services, which oversees private insurers. The agency did not comment on whether this particular arrangement with Insperity, which is known as a professional employer organization, violates state law in any way.

After this story was published, Insperity responded to a request for comment, saying that its plan with United Healthcare “includes coverage for pregnancy termination services that are medically necessary in accordance with applicable law. Coverage under the plan has not changed or been diminished as a result of the Supreme Court’s decision in Dobbs.”

United Healthcare also sent a statement after publication that simply said fully insured health plans must comply with regulations in the states where they’re written.

Gothamist did not reach out to Rachael’s employer because she wants to remain anonymous.

Filling in the gaps in abortion coverage

Despite these pitfalls, New York is still one of the more generous states when it comes to abortion coverage.

The Empire State is one of only eight that require private health plans to cover abortions, according to the Guttmacher Institute. And it’s part of an even smaller cohort that calls for plans to pay for the procedure in full so none of the burden is placed on patients. Far more states have laws explicitly restricting coverage for abortions, Guttmacher found.

New York also covers abortions under Medicaid, the public health insurance program for people with low incomes. To do so, the state must pick up the full cost of the procedure, since federal dollars are prohibited from being used for abortions.

Gov. Kathy Hochul makes an announcement on abortion rights, July 12, 2022.

But advocates said there is still room to improve access to abortion and other reproductive services.

For those paying out of pocket, abortions can be prohibitively expensive. In 2020, the median cost of a medication abortion in the U.S. was $560, according to a study published by Health Affairs. It was more for a procedural abortion – $575 for those performed in the first trimester and $895 in the second trimester.

New York state and city legislators have recently taken steps to secure and expand access to free abortions. And the state Legislature recently took the first step toward enshrining abortion rights in the state constitution, which would make it harder to roll back government protections in the future. At the same time, many private employers — including some that are based in New York — have looked at ways to expand their benefits to secure abortion access for employees who live in more restrictive states.

Earlier this month, Mayor Eric Adams signed a law requiring clinics run by the city health department that offer sexual health services to provide medication abortions at no cost to patients.

Gov. Kathy Hochul also included provisions in the most recent state budget that reinforce existing coverage requirements for insurers. She notably eliminated language limiting that coverage to so-called “medically necessary” abortions.

Abortion care is health care ... We shouldn't be putting people in categories of deserving and not deserving.
Katharine Bodde, senior policy counsel specializing in gender equality and reproductive rights for the New York Civil Liberties Union

The term “medically necessary” is often left open for interpretation, which can influence people’s benefits. According to the Department of Financial Services, “insurers interpret medical need broadly in these cases and DFS is not aware of denials for these procedures due to a medical necessity review.”

But Katharine Bodde, senior policy counsel specializing in gender equality and reproductive rights for the New York Civil Liberties Union, argues the term “medically necessary” has served to impose unnecessary restrictions on coverage. She praised the new language in the budget as a step forward.

“Abortion care is health care,” she said. “It is something that people need for all different types of reasons. We shouldn't be putting people in categories of deserving and not deserving.”

The New York State Department of Health, which oversees Medicaid plans, said it takes a broad view of the term, relying, in part, on a definition provided in the 1973 decision for the Supreme Court case Doe v. Bolton. The ruling stated that whether an abortion is necessary is "a professional judgment that may be exercised in the light of all factors — physical, emotional, psychological, familial, and the woman's age — relevant to the well-being of the patient.”

Who uses abortion benefits?

While companies that are self-insured still have discretion over what types of care they cover, many in New York and the surrounding areas offer broad coverage for abortions – and that hasn’t changed post-Roe, said Adam Okun, the northeast regional practice leader for EPIC, a national insurance brokerage and consulting firm.

He said the main thing his clients are talking about with regard to abortion, is how to cover travel and lodging benefits for employees who need to go out-of-state for the procedure.

But Okun noted that employees of the white-collar firms he represents rarely take advantage of abortion coverage when it is available. “There's very, very modest – literally, almost no abortion utilization among our clients,” he said.

Among Okun’s clients, a company with 1,000 employees typically pays for one abortion every couple of years, he said. He theorized that could be because of the employee population or because of stigma that drives people to try to hide their abortions from their employers.

But for low-income New Yorkers, access to free care can make a huge difference. Allie, a doctoral candidate based in Brooklyn, was able to get an abortion covered last April under the Essential Plan, a publicly funded health plan for low-income residents who don’t qualify for Medicaid.

“I wasn’t happy in my relationship,” Allie said of her decision to get an abortion. “On top of that, I am very low-income. It would be really irresponsible for me right now to raise a child on my salary in New York City.”

Allie shared an insurance statement she received after her procedure showing that her health care provider charged her insurer more than $5,000, of which the plan agreed to pay about $1,400.

Allie, who declined to give her full name because of the stigma around abortion, said it wasn’t made clear to her at the time that the abortion would be free for her. But, more than a year later, she said she is grateful she hasn’t received a bill.

This story was updated with comments from Insperity and United Healthcare.