Businesses face major benefits questions amid Roe uncertainty

Corporate America is facing a flurry of questions about how it provides health benefits in the wake of a leaked U.S. Supreme Court draft that indicates the federal right to abortion could be overturned.

Why it matters: Businesses hoping to use reproductive health benefits as part of efforts to recruit and retain employees would have to be careful not to run afoul of laws should states be allowed to ban abortions.

  • The balancing act over the next few months could get messy, experts warn.

What they’re saying: “It’s a serious issue for employers,” said Candice Sherman, CEO of the Northeast Business Group on Health. The group represents roughly 80 large companies such as American Express, Colgate, Moderna and Pfizer.

  • Limits on abortion coverage have the potential to impact the physical and mental health of the workforce and could come as many employers are addressing equity and inclusion for women, people of color and LGBTQ employees, Sherman said.
  • That is often communicated by companies through benefit design.

State of play: Some large companies like Amazon, Apple and Lyft have already announced plans to provide workarounds in those states with abortion restrictions.

  • But many others are still on the sidelines as they tease out employees’ priorities on abortion-related benefits, as well as the potential costs and legal risks.
  • Eleven states restrict insurance coverage of abortion in all private insurance plans written in the state, including those offered through Affordable Care Act markets, according to the Guttmacher Institute. Six other states require abortion coverage in private health insurance plans.

Zoom in: One of the most immediate questions is what kind of employer-sponsored abortion coverage – as well as enhanced benefits like travel stipends – might create legal liabilities for companies in states that ban abortion.

  • “There’s a question as to whether providing transportation benefits could be constructed, or at least alleged by the states in enforcement, as aiding and abetting,” said Garrett Hohimer, director of policy and advocacy for the Business Group on Health. That group counts corporations like The Walt Disney Co., Walmart and General Motors among its members.
  • Companies like Citigroup that pay for out-of-state abortions have already been threatened with the loss of business.

Yes, but: In the case of a challenge, companies would have a strong argument that federal protections for providing abortion care benefits preempt state laws, Emily Dickens, the head of government affairs for the Society for Human Resource Management, told Axios.

  • Dickens pointed specifically to the Pregnancy Discrimination Act which specifically says an employer is permitted to provide health insurance coverage for abortion, as well as protections under ERISA law.

But, but, but: It’s not a sure thing. For instance: “ERISA is not a get out of jail free card,” Hohimer warned, saying there is some question about how the law would be interpreted.

  • While experts largely believe the Affordable Care Act would provide protections for birth control coverage, it’s unclear how fertility benefits such as egg freezing, surrogacy or in vitro fertilization might be affected, Sherman said.

What to watch: Many large companies already offer health benefits allowing workers to travel to Centers of Excellence for procedures like joint replacements or cancer care.

  • Those kinds of benefits will likely gain more attention because of the attention surrounding reproductive health, Hohimer said.
  • Sherman said this may also raise questions about whether there’s flexibility in the tax code to expand the scope of Flexible Spending Accounts or Health Savings Accounts to cover travel for any health care issues.

The bottom line: “Assuming this discussion comes down the way we think it may, organizations are going to have to work very hard,” Sherman said.

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