Medical Travel Benefits: What Employers Need to Know – Employee Benefits and Compensation

Last month, the United States Supreme Court passed the decision Dobbs v. Jackson Women’s Health Organizationoversubordination. Roe v. Wade and returning the issue of abortion to the states. Since the decision, abortion has become illegal in several states while continuing to be available in others. In response, some companies have announced that they will reimburse employees for medical travel expenses—the cost of obtaining medical care that is not available locally. This article describes some employee benefits related to these reimbursement arrangements, which we call medical travel benefits.

Before we get into the details, let’s be clear about it
The key message: A company cannot simply modify its corporate travel reimbursement policy. Since the payment is made when medical care is received, the arrangement will be part of a group health plan or one. Making the payment taxable does not change this fact. If not a medical travel benefit Properly designed, violates the Affordable Care Act (ACA). The penalty for such violation shall be $100 per person per day of non-compliance. Medical travel benefits should also be respected Other employee benefits laws.

What does “properly designed” mean?

The ACA generally favors broad major medical plans and undermines narrow single-benefit medical plans, although there are some exceptions. If a company wants to offer a single medical benefit such as a medical travel benefit, it must meet one of these exceptions. for example:

• Medical travel benefits, like any other covered benefit, may be added with co-pays and deductibles as part of the company’s primary medical plan. Many major medical plans pay for travel for implant procedures – the company will extend the benefit to cover additional travel.




• Medical travel benefits may be offered as a standalone program:

  • For employees enrolled in the company’s primary medical plan and, if the company so desires, for employees enrolled in another employer’s primary medical plan;

  
  

  • For employees who are eligible for the company’s main medical plan, even if they are not enrolled, with certain annual limits; Or

  
  

  • For all employees (or any non-discriminatory group of employees) unless the program provides a “significant benefit in the nature of medical care.”

All of these options have additional requirements that are beyond the scope of this article. When designing medical travel benefits, the company must consider eligibility, overall cost, ease of administration, integration with health savings accounts, privacy of health information, and whether the benefits are taxable or non-deductible. For example, a medical travel benefit included in a major medical plan will generally be non-taxable and will need to follow IRS rules regarding medical travel reimbursement. Those rules don’t allow reimbursement for meals, limit lodging payments to $50 per day ($100 with a friend), and require detailed verification.

What is meant by “Other Employee Benefit Laws”?

Generally, when a company offers a group health plan, the plan must comply with various laws, including but not limited to the ACA, ERISA, COBRA, and HIPAA. ACA compliance is briefly discussed above. Some of the main compliance points of the other laws are listed below.

Erisa. Medical travel benefits must be included in the plan document and summary plan statement, which must include ERISA-compliant claims and appeals procedures. The medical travel benefit is generally subject to the requirements of Form 5500.

COBRA. If the employer had at least 20 full-time employees in the previous calendar year, it must comply with COBRA for medical travel benefits. Among other things, companies should determine COBRA premiums and contact their COBRA administrators to ensure that medical travel benefits are included in any COBRA election notice.

HIPAA. As long as the medical travel benefit is not managed in-house by the company and covers fewer than 50 employees, it is subject to HIPAA Privacy and Security. The company must ensure that it has established an effective HIPAA compliance program to protect personally identifiable health information.

It is clear that companies want to support their employees. However, the benefits of medical travel present many pitfalls for the unwary. Companies should not go down this path without a trusted advisor.

The content of this article is intended to provide a general guide to the subject. You should seek specialist advice regarding specific circumstances.