What to Know About Offering Abortion Benefits in States Where Abortion Is Restricted

When the U.S. Supreme Court overturned Roe v. Wade and the abortion protections it afforded in June, companies across industries responded.

Dick’s Sporting Goods pledged to reimburse employees for up to $4,000 worth of travel expenses for those who need to go to another state for care. Amazon said it would also reimburse up to $4,000.

Buzzfeed and Bank of America both said they’d cover abortion-related travel costs. Estee Lauder said it would cover both travel and lodging costs. Goldman Sachs, Hewlett Packard, Morgan Chase, Lyft, and well over a dozen other companies also said they would cover the costs of abortion travel in some way.

Companies big and small made pledges to support their employees out of the gate. But the ruling is so fresh and unprecedented. Quite a bit of confusion and even some legal gray areas can pop up between announcing abortion access support and actually providing it.

“I think a lot of employers in reaction to the Dobbs decision are making these very public statements that you’re going to offer abortion travel benefits,” Bethany Corbin told NPR. Corbin is senior counsel at Nixon Gwilt Law, which specializes in healthcare law. She continued: “A lot of them have not operationalized that yet. They’re still working through how this actually works in practice.”

Perhaps you’ve already committed to offering abortion care to your employees. Now, you may be trying to figure out how exactly to do that. Maybe you’ve taken a slower approach of doing research into coming up with an effective program first.

Either way, here’s what to know about offering employees abortion benefits in states where abortion is restricted.

First, figure out what’s already covered by your health insurer

If you’re looking to ensure that your employees have access to abortion in a state that has banned or is working to ban the procedure, the first thing to do is understand what’s already covered by your health insurer.

If your company has taken the self-insured approach to health insurance, you’ll likely have more flexibility than fully-insured companies that offer insurance through a third-party provider.

Those who are self-insured can change their own plan at any time. For those that are fully insured, you have to get the buy-in from your insurance company to make the change if abortion services aren’t already covered.

“Our experience has been that most plans that currently cover abortions would only do so when those abortions are permitted by law,” wrote members of the Foley & Lardner LLP law firm earlier this month. Often, they write, “the plan contains a general provision restricting payment to services allowed under applicable law and provided by a licensed medical provider.”

Many health insurance plans already offer travel benefits like reimbursements for organ transplants and other services at “centers of excellence.” Therefore, this might be the place to fold in abortion travel care. You might be able to use this same administrative process to provide travel benefits for abortions.

Understand the Employee Retirement Income Security Act (ERISA)

ERISA is a federal law that regulates most employee health insurance plans. The goal of this legislation is to provide national rules. That way, companies and insurers don’t have to wade through sometimes conflicting state laws.

There’s 1 most important thing to know about ERISA. It’s a law that generally supersedes any and all state laws that relate to any employee benefit plan. This includes laws that are in place currently or might be in the future.

Many are hopeful that ERISA will shield employers from legal liabilities, but there’s one snag. The law also states that it doesn’t supersede state criminal laws. Considering that many states banning abortion are also looking to criminalize it, the protection that ERISA might offer could be limited.

However, as with all laws, what they actually mean on the ground will be decided in court cases that challenge them. It remains to be seen just how much protection employers can expect from ERISA.

Consider tax laws regarding lodging and reimbursements

Right now, the IRS generally limits tax-free lodging expenses to $50 a day for each person who is traveling. Daily transportation expenses are also similarly limited to $50 a day, Taft Law explains.

Depending on how far your employees might have to travel and how long they’d have to stay there, it might be difficult to stay within the IRS’s parameters. You could end up paying taxes on those benefits for any reimbursement above the $50 a day limits.

The IRS also has rules about travel and lodging as they relate to insurance deductibles. This is particularly important if your company offers high-deductible healthcare plans. “Based on current IRS rules, the travel and lodging expenses would need to be included in the deductible before the plan begins to pay benefits,” Taft Law notes.

A different solution: Expanding paid time off

There are a myriad of potential legal risks and complications that could stem from offering abortion services in this country. Especially for small and medium-sized businesses that can’t afford to self-insure like larger companies can, there’s still another option.

And it’s one that doesn’t come with nearly as much legal risk. Plus, just covering travel and lodging expenses might not be nearly enough.

“Every hour a worker without vacation or sick leave spends driving to another state for medical care is an hour they aren’t being paid. An employee making $15 an hour who loses a week of work for an out-of-state abortion stands to forgo as much money as the cost of the procedure itself,” writes Elizabeth C. Tippett, an associate professor of law at the University of Oregon, in The Conversation. “In other words, the workers who can least afford to forgo wages for an abortion are the most likely to be put in that situation.”

A solution? Expanding sick leave, vacation, and flexible PTO offerings. This helps the employees who can’t afford to take the time off to get an abortion. It also avoids some of the potential legal hassles of more direct forms of support.

It’s vital to keep in mind the privacy requirements outlined by the Healthcare Insurance Portability and Accountability Act, or HIPAA.

There are privacy upsides, too. “Unlike policies involving travel or health benefits, employees can often avail themselves of time off without providing receipts or documentation,” Tippett writes.

Providing more direct abortion access might mean that employees have to share personal information that they’re not comfortable sharing. This also opens an employer up to potential legal risks. It’s vital to keep in mind the privacy requirements outlined by the Healthcare Insurance Portability and Accountability Act, or HIPAA.

Deciding what to do: Start with your mission, values, and goals

For some companies and brands, it makes sense to be outspoken abortion proponents. For others, it might make more sense to support your employees in a more private manner.

“A quiet expansion of the company’s paid time off [policy] enables employers to help women without attracting controversy,” Tippett adds. “Companies are already nervous about abortion-related discussions at work. They may not want to generate more internal conflict at a time when partisan rancor is at a fever pitch. And while expanding paid time off might not seem like a lot, it would be one less hurdle for women experiencing nothing but hurdles.”

The right solution for your business is exactly that — the right solution for your business. Take a look at your company’s mission and values. Ask your employees what they want to see.

Take some time to think about what feels both right and feasible for you to implement now. Start where you can and improve things over time. Every step in the right direction helps.