Additional Options for Reimbursing Medical Travel Expenses
Ensure your workplace is meeting a best-in-class standard in how it meets the reimbursement needs of your whole workforce.
Overview
Abortion is a key component of workers’ reproductive and maternal healthcare. The ability to choose if, when, and how to have a child is crucial to workers’ health and wellbeing personally and professionally. For employees who live in states where abortion is outlawed or restricted, access to safe abortion care for themselves or their family can be difficult and costly.
According to our research, the majority (85%) of companies do offer some sort of abortion travel benefit. Unfortunately, the coverage is not always as comprehensive as it could be, nor is workers’ health data consistently protected. RMH Compass’ proprietary data finds that only 22% of companies use a third party to administer their abortion travel benefit, leaving companies and employees exposed. Well-intentioned employers that do not administer abortion travel reimbursement through a third party miss a critical safeguard. Without this safeguard, employees must disclose personal health information to HR, finance and/or their managers, undermining trust and exposing the company to legal risk.
Most workers in the U.S. do not have sufficient savings to cover unexpected medical expenses. The financial fragility of many workers is underscored by the fact that 37% of adults would have to dip into savings, borrow money, or sell something to cover a $400 expense (according to the Federal Reserve). Costs associated with obtaining abortion care, especially if travel is required, almost always exceed $400.
Employers have a responsibility to provide these benefits – and an opportunity to set a high-standard in doing so – as the implications for workers when they do not have access are significant.
The Turnaway Study has found that the economic and health consequences of being denied abortion care for women can be dire and life-altering.
Economic Impact
Four times greater odds of living below the Federal Poverty Level (FPL).
Greater likelihood of not having enough money for basic living expenses (food, housing, transportation).
Lower credit scores, increased debt, and more negative public financial records (e.g. bankruptcies, evictions).
Taking longer to achieve similar levels of employment as those who received abortions.
Health Impact
More serious complications from the end of pregnancy, such as eclampsia and infections.
Greater chronic pain and fair or poor health for years after the pregnancy.
These health complications can have a direct financial impact on an employer if they provide healthcare via a self-insured plan. Data shows when workers are stressed about finances and health expenses, they are more likely to have increased absenteeism and lower productivity, also having a negative financial impact on the employer. In conclusion, there are compelling business reasons for employers to implement comprehensive, well-designed abortion and medical travel benefits.
RMH Compass recommends that employers provide abortion and medical travel benefits via their Employer-Sponsored Health Plans (ESHPs). To read more about why this is a best practice, visit our resource. However, beyond providing coverage via an ESHP, there are other methods that employers can leverage to cover medical expenses and travel-related costs. We encourage employers to consider these additional strategies to cover travel expenses that may not be covered or reimbursed in full, such as lodging, mileage and childcare expenses.
RMH Compass considers a best-in-class benefit one that covers elective and non-elective abortion, with a medical travel reimbursement benefit that has no dollar limit through an Employer-Sponsored Health Plan (ESHP), plus a Lifestyle Spending Account (LSA) or Employee Relief Fund (ERF) that can cover unreimbursed travel costs, such as childcare, lodging and mileage.
Below we provide details on different coverage approaches in order of what we consider to be strongest to least strong. This position is informed with several considerations in mind including:
Comprehensiveness of coverage
Data privacy considerations
Ease of use for employees
Cost to employer
Cost to employee
As always, employers should consult with their benefits brokers and legal counsel when weighing the best course of action.
Lifestyle Spending Accounts (LSAs)
Lifestyle Spending Accounts (LSAs) are employer-funded accounts designed to support employees' physical, mental, and financial wellness. LSAs can be broadly or narrowly defined, depending on the employer's preference. They can be for “health and wellness” purposes – covering a range of services like gym membership and acupuncture – or they can be defined for specific purposes, such as “reproductive and maternal health wellness.”
LSAs can be offered to all workers or more narrowly-defined workforce segments, which means a LSA can be extended to workers who aren’t eligible or enrolled for health benefits through an ESHP. These workers tend to be the lowest-paid and most vulnerable populations, so a supportive LSA can be hugely impactful to this community of workers.
LSAs can not be used to cover medical costs directly, but they can support travel-related expenses, such as childcare, mileage and lodging costs. LSAs are not typically HIPAA compliant, however employers can establish preferred protocols with their LSA administrator regarding the level of data collection for cost reimbursement. For travel expenses, administrators can minimize any data collection to ensure that worker data protections are in place.
For employers, there are additional costs associated with the implementation of an LSA. Adding an LSA usually involves an administrative set-up fee, plus either flat annual fee or per employees per month (PEPM) fee, so the cost of an LSA may make this product a better fit for larger employers. However, employers who already have a third-party benefits vendor should ask if an LSA can be added to their current offerings – many vendors offer consolidated benefits so there could be minimal incremental cost for the employer. For employees, one drawback of an LSA is if they utilize the LSA benefit, the funds are taxed as ordinary income.
Employee Relief Funds (ERFs)
Employee Relief Funds (ERFs), also known as an Employee Assistance Fund or an Employee Crisis Fund, are designed to help employees cope with unexpected hardships that place undue financial stress on them and their families. Like LSAs, ERFs are available to eligible and ineligible workers. Because ERFs are considered grants, they are not treated as taxable income for the employee.
Like LSAs, ERFs can not be used to cover medical care, but they can support travel-related expenses, such as childcare, mileage and lodging costs. ERFs can be designed expansively, to provide grants for other costs that workers may incur that could cause financial hardship, and can also include fertility support and other family care-related expenses.
Like an LSA, implementation of an ERF usually involves an administrative set-up fee, plus either flat annual fee or PEPM fee, so the cost of an ERF may make this product a better fit for larger employers. Employers who already have a third-party benefits vendor should ask if an ERF can be added to their current offerings – many vendors charge flat fees but offering additional benefits may not involve additional administrative or overhead fees.
Dependent Care Flexible Spending Accounts (DCFSAs)
Dependent Care Flexible Spending Accounts (DCFSAs) Employers should offer DCFSAs to their whole workforce to generally help lower the cost of childcare for workers. An additional benefit of a DCFSA is that childcare costs incurred as a result of travel can be reimbursed via these funds. DCFSAs are a valuable employee benefit that allows individuals to pay for eligible dependent care expenses with pre-tax dollars, leading to significant tax savings. Qualifying expenses include a range of childcare services, nanny and sitter services, and daycares. Employers can make contributions to a DCFSA and these contributions are not considered income for the employee. Total DCFSA contribution limits are set by the IRS and in 2025 are $5000 for a couple and $2500 for an individual. Employee and employer contributions together can not exceed the annual contribution limits.
We consider the following health expense reimbursement mechanisms to be less desirable. There are a few challenges to these approaches, including eligibility limitations, potential administrative reimbursement limitations and the fact that few employers usually contribute to these types of accounts at amounts that would not sufficiently cover the cost of abortion care and medical travel reimbursement.
Health Savings Accounts (HSAs)
Health Savings Accounts (HSAs) are a type of savings account that sets aside money on a pre-tax basis to pay for qualified medical expenses. Employers can contribute to HSAs, and the annual contribution maximums (combined limits for employee and employer contributions) as set by the IRS are $4300 for an individual and $8550 for a family.
While HSAs are a good reimbursement option because they are administered by a HIPAA-compliant third-party vendor and can be used to reimburse medical costs, they are subject to the same IRS-defined reimbursement limits on lodging and mileage.
There are several factors that limit the benefit of HSAs as a solution to covering abortion and medical travel-related care. These include the fact that HSAs are only available to workers who are enrolled in a High-Deductible Health Plan (HDHP). This means HSAs are not generally available to all employees or even all eligible employees, assuming an employer offers multiple health plan options. While HSAs are generally subject to federal ERISA (the Employee Retirement Income Security Act of 1974) guidelines and should be used to cover any abortion and related travel expenses, the reality can be more complicated, depending on whether the employer is on a self- or fully-insured health plan. If the plan itself is self-insured by the employer, then these expenses should be reimbursable – but also, there should be little need for a HSA at all, as the self-insured plan should cover abortion care and medical travel reimbursement. If an employer is on a fully-insured health plan in an abortion-banned state, the HSA administrator may refuse to reimburse costs related to abortion care even if that care was accessed out-of-state.
Healthcare Flexible Spending Accounts (FSAs)
Healthcare Flexible Spending Accounts (FSAs) are special accounts that can cover certain health care costs. If offered by an employer, they can be available to any health benefits eligible employees. Contribution limits on FSAs are lower than HSAs, though employers are able to contribute to these accounts as well. FSAs are usually administered using HIPAA data compliance, though affirming this with your third-party administrator is always a good idea.
FSAs can also be used to cover medical travel-related expenses but are restricted to the same IRS reimbursement limits (particularly limiting on lodging and mileage expenses). The upside of these products is that the contributions from both employer and employee are pre-tax, like HSAs. Unlike a Dependent Care FSA, a Healthcare FSA can not be used to reimburse for childcare expenses.
The TakeAway
RMH Compass considers a best-in-class benefit one that covers elective and non-elective abortion, with a medical travel reimbursement benefit that has no dollar limit administered through an ESHP, plus a LSA or ERF that can cover unreimbursed travel costs, such as childcare, lodging and mileage. To learn more about how self-insured and fully-insured employers can ensure abortion care and medical travel is reimbursed through their ESHP, visit our resource on Expanding Abortion Coverage.
It is a best practice to add an LSA or ERF, and/or dependent-care FSA to cover unreimbursed expenses such as the full-cost of lodging and mileage plus any childcare-related expenses. On their own, LSAs and ERFs do not offer full reimbursement for abortion care and medical travel expenses because they can not be used to cover medical expenses directly.
We do not encourage relying on HSAs and FSAs as the mechanism to cover abortion care and medical travel expenses. While HSAs and FSAs can be used to cover abortion care and medical travel, they are an inferior solution because HSAs are only available to employees on a HDHP plan and both FSAs and HSAs, if administered in tandem with a fully-insured ESHP in a state that bans abortion care, may deny reimbursement claims.
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