Companies offer to help employees seeking abortions. It’ll be tricky.

The Washington Post / Taylor Telford

15:27 JST, July 3, 2022

Dozens of American companies, big and small, are offering to cover travel costs for employees seeking abortions despite an array of potential legal and financial risks.

As Republican-led state legislatures and national antiabortion groups advance plans to stop people in states where abortion is banned from seeking the procedure elsewhere, corporations could find themselves or their employees criminally liable for helping to procure an abortion, experts say. And companies’ ability to provide abortion travel coverage to their employees will vary widely by location and the type of health plan they offer.

Still, companies are forging ahead.

“Companies have apparently taken a stance that they are willing to shoulder that risk to send signals of support to their employees and the market,” said Meredith Kirshenbaum, an employment attorney at Goldberg Kohn in Chicago.

More than 80 companies – from household names such as Netflix, Target, Disney, JPMorgan and Procter & Gamble to smaller firms across tech, media and retail – have taken action in response to abortion bans, according to a tracker from Rhia Ventures, an investment fund focused on reproductive rights.

Many have said their health plans will cover medical travel for care not available near employee’s homes, including abortions. Patagonia offered to cover legal costs for employees arrested while “peacefully” protesting. Lyft and Parade are donating to abortion funds and other organizations dealing in reproductive-health care.

Corporate rules of engagement on social issues have shifted dramatically in the past few years, amid public pressure on companies to take stands on everything from police brutality and racism to climate change and voting rights. The fallout from the end of Roe v. Wade is forcing corporations to redefine their vision for social responsibility yet again, according to Davia Temin, chief executive of Temin and Company, a crisis management firm.

“It is illuminating who we really are, what we stand for, how we are changing, when we take a stand, and when we remain silent,” Temin said.

This time, corporations have largely avoided the sort of impassioned letters to employees and stakeholders that they usually put out while weighing in on key social issues, Temin noted. Instead some companies moved swiftly to expand their health-care plans despite the uncharted territory.

“What corporations are doing in a pragmatic manner is they are coming up with solutions for their people – because, of course, some of their employees are extraordinarily upset,” Tevin said. “Instead of the persuasive and heartfelt letters, you’re getting action.”

The movement to offer travel reimbursement is especially striking given the polarization around abortion. Jake Teeny, assistant professor of marketing at Northwestern University, said most of the companies that have taken strong stances target consumers that are already aligned with their social values.

Others companies have “expressed support for their employees but not outright opposition to the ruling,” Teeny said. He pointed out that Lyft and Nike both stopped posting on Twitter in the days leading up to and following the Supreme Court decision, despite covering abortion travel costs for their workers.

Several brands have taken the approach of supporting reproductive health through travel reimbursements “without explicitly stating that they oppose the new ‘rule of the land,’ ” Teeny said. “Instead these companies are expressing that they want to support their employees’ personal decisions and beliefs.”

Levi Strauss & Co. did not update its health plan in response to the Dobbs decision, said Tracy Layney, the company’s chief human resources officer. But it already covers “a broad range of reproductive-health-care services, including abortion” and employees are eligible for reimbursement of travel expenses for services not available within 50 miles of their homes.

“Employees in some states will likely have fewer rights than employees in others,” Layney said. Aside from causing some employees to need time off for medical travel, “this will likely result in productivity losses and significant financial and emotional stresses for these workers and their families.”

Levi Strauss also has a process to assist part-time workers with medical-related travel, Layney said.

“We know this is a fraught conversation; it’s not something we enter into lightly,” Layney said. “But women make up 58% of our global workforce, and in recent years, numerous employees have expressed to leadership their growing alarm over the rollback of all forms of reproductive care.”

But corporations face potential legal complications, no matter how carefully they proceed, according to Peter Bamberger, professor at Coller School of Management at Tel Aviv University.

“Even before dealing with the bigger questions – reputational harm, political retribution and exposure to legal liability – associated with using employee benefits to help employees access abortion services, employers are going to have to be prepared to face off against a byzantine mix of bureaucratic, legal and tax challenges,” Bamberger said.

“And even if employers manage to meet those challenges, I can’t even begin to imagine the “sludge” that women are likely to face when trying to actually secure the reimbursement promised to them by their employer,” Bamberger said.

The Supreme Court decision will also widen divisions over access to reproductive care through company health-care plans. While California, New York, Oregon and a few other states require certain insurance plans to cover abortion, others, such as Indiana, Kentucky and Missouri, restrict or bar it, with varying exceptions for rape, incest or life endangerment.

The situation is further complicated by the nature of company health benefits.

“Abortion coverage is not consistent at all across employer group health plans,” said Lorie Maring, employee benefits partner at the law firm Fisher Phillips.

Large employers often offer self-insured plans, which means they are not regulated by states and the employer bears the risk from claims rather than the insurance carrier. Self-funding is “common among larger firms because they can spread the risk of costly claims over a large number of workers and dependents,” according to a 2021 analysis of employer health benefits from the Kaiser Family Foundation.

It found that 64% of U.S. workers were covered under self-funded plans last year.

Many self-funded plans already cover travel associated with medical procedures. Self-funded plans also usually offer abortion coverage for pregnancy “resulting from criminal activity,” Maring said, but “full coverage for elective abortion has been more of an exception” in the group health plans she has worked with.

Self-insured plans offer companies some legal protection in providing abortion travel benefits under the Employee Retirement Income Security Act of 1974 (ERISA), which contains a provision preempting any state law that relates to an employee benefit plan. But that’s almost certainly going to be a target for litigation going forward, according to Kirsten Vignec, chair of the executive compensation and employee benefits group at Hill Ward Henderson.

Such group health plans are also subject to the HIPAA privacy protections, Vignec said.

“Those companies that sponsor self-insured health plans will have more flexibility,” Vignec said.

However, smaller companies are less likely to offer self-insured health-care benefits – which could now affect their decisions on covering abortion-related travel. Smaller employers tend to favor fully insured plans, in which insurance companies assume financial responsibility for claims.

Because these plans are subject to state insurance laws, they may not have the ability to add travel costs for an abortion in states that have limits or bans.

“Many smaller and midsized companies are likely taking a wait-and-see approach as states and insurance companies figure out the next steps and potential pitfalls,” Vignec said.

Companies helping employees seek reproductive care out-of-state could still be at risk of criminal liability, as several states, including Texas and Missouri, seek to target those who “aid and abet” abortion.

“This is an interesting concept for employers because they’ve never been in a situation before where they had to worry that in administering their group health plans, their employees, officers or directors could face criminal liability,” said Seth Peretta, principal at the Groom Law Group, who serves as outside counsel to the American Benefits Council.

ERISA does not offer immunity from violations of criminal law, meaning that a company would not be protected from prosecution if it offered a legal benefit that another state might consider criminal, as some states are threatening to do.

“I worry it’s going to be a mess,” Peretta said.

In March, in the wake of the leak of a draft of the Dobbs decision, Texas State Rep. Briscoe Cain (R) wrote to Citigroup, calling the bank’s announcement that it would cover abortion-related travel a “grotesque abuse of the fiduciary duty that you owe to the many shareholders of your company that oppose abortion.”

In the letter, Cain said he plans to introduce a bill that would bar local governments in Texas from doing business with any company that provides an abortion-related travel benefit or otherwise pays the abortion-related expenses of its employees.

In a legal alert about the impact of the Dobbs decision, employment lawyers at Ropes & Gray noted that out-of-network services typically require employees to pay higher costs out-of-pocket, which could limit the effectiveness of financial assistance through travel benefits.

Remote abortion access – where abortion medication is prescribed through telemedicine – presents “additional questions” the lawyers noted.

The Hyde Amendment prohibits federal funds, including Medicaid and Medicare, from covering abortion except in cases of rape, incest and life endangerment. It also prohibits all health insurance offered to federal employees and military personnel from covering abortion, except in those cases.

Exchange plans purchased through the marketplace under the Affordable Care Act are not required to provide abortion coverage, and more than half of states prohibit these plans from covering it, according to Politico.

Yet even the Department of Defense sought to reassure employees that it would still assist with abortions in cases permitted by Hyde, according to a Pentagon memo dated June 28, first reported by Military Times.

“We will take every action within our authority to ensure the safety and health of each and every member of our team,” reads the memo signed by Gil Cisneros, the undersecretary of Defense for Personnel and Readiness. He emphasized that “the implications of the Supreme Court’s decision are complicated and must be evaluated against various state laws, together with the views of the Department of Justice.”