Considerations for Employer-Provided Abortion Benefits

Shannon Henschel

Associate Editor

Loyola University Chicago School of Law, JD 2024

Following the ruling of Dobbs v. Jackson Women’s Health Organization and subsequent reversal of Roe v. Wade, employers have begun to re-strategize how to help their employees legally access abortions. Several U.S. companies, including Amazon, Meta, Apple, and Microsoft, have released statements that they will cover transportation costs to other states for employees seeking an abortion.

A framework of compliance considerations arises under an employers’ federal and state obligations. Generally, employers defer to federal law for employee-sponsored benefit plans, which is covered by the Employee Retirement Income Security Act of 1974 (ERISA). ERISA prevents states from regulating employers’ healthcare plans, meaning some employers will not be adversely affected by a state’s abortion ban if they choose to cover their employees’ transportation costs. However, there are key limitations to the scope of ERISA.

When do employers have to comply with state versus federal law?

The scope of ERISA is limited to employers with self-insured plans, meaning that companies whose benefit plans are funded directly by themselves need not worry about state laws. The federal preemption from ERISA will be a key defense for these companies who move forward with providing abortion benefits. Conversely, employers with fully insured plans, or plans that are provided by an insurance company, will not be able to use the federal preemption from ERISA and will likely have to comply with state law.

As a response to the safety net that ERISA provides, several anti-abortion states are initiating bounty measures which will allow citizens to sue a company that “aids and abets” an abortion. “Aiding and abetting” includes reimbursement for travel costs to obtain an abortion and will put these companies at risk of litigation for assisting individuals in violating state bans on abortions.

The web of legal intricacies of travel reimbursements will vary from state to state, however in Justice Kavanaugh’s opinion in Dobbs v. Jackson Women’s Health Organization he states “[M]ay a state bar a resident of that state from traveling to another state to obtain an abortion? In my view, the answer is no based on the constitutional right to interstate travel.” Justice Kavanaugh made no mention of the 1975 Supreme Court case Bigelow v. Virginia, which held that the state of Virginia could not prevent its citizens from traveling to New York to obtain abortions. This case certainly sets a precedent for allowing interstate abortion access, but the added layer of employer-funding creates uncertainty. University of Pittsburgh School of Law is examining the intricacies this creates with regards to the Full Faith and Credit Clause, the Due Process Clause, and general federalist principles.

As of now, there is only one certain way that anti-abortion states can create hardships for employer’s attempting to provide these travel benefits. This would be by barring abortion-related travel in a contract of group health insurance issued by a health insurance provider within a certain state. This would be possible because states are not subject to ERISA. A loophole companies could use in this situation would be to provide the abortion travel benefit under a split-funded arrangement, which is where a fully insured medical plan is paired with a health reimbursement account or health reimbursement arrangement.

How should companies move forward with state versus federal law compliance?

The path ahead for companies offering abortion benefits is unknown, but potentially optimistic. Current law does state under the Internal Revenue Code that medical care includes transportation costs for “diagnosis, cure, mitigation, treatment, or prevention of disease or for the prevention of disease or for the purpose of affecting any structure or function of the body”, and an abortion is confirmed to be an effect on a structure of the body.

Considering this, as well as individual companies’ protections under ERISA, courts will have to decide whether “aiding and abetting” applies to out of state employer-funded abortions.

Most signs indicate that a state’s authority ends at its borders, therefore companies with self-insured plans will not likely need to comply with individual state abortion bans but should take note of any “aiding and abetting” bounty measures in place. Without much legal precedent in place as of now, the interjurisdictional abortion wars will be a developing area of law.