The United States had more than a month to prepare itself for the Supreme Court’s Dobbs v. Jackson Women’s Health Organization ruling, which overturned the Constitutional right to an abortion established by Roe v. Wade, but employers employers still found themselves scrambling to respond when the decision was handed down June 24.
Some, like Citigroup, had already announced an abortion travel benefit — well before the Dobbs decision was leaked. “In response to changes in reproductive healthcare laws in certain states in the U.S., beginning in 2022 we provide travel benefits to facilitate access to adequate resources,” the company wrote in an annual shareholder meeting notice and proxy statement. It did not elaborate on the policy in that report.
Many employers waited until the Dobbs decision was handed down to follow suit, but within days, a range of companies, from Dick’s Sporting Goods to Disney, announced — whether through public posts on social media or internal memos to staff — they would expand benefits coverage to help employees access abortion services.
But what compliance challenges are presented by such a politically charged benefit? And can employers give workers access to such support while still protecting their privacy? To find out, HR Dive spoke with an an exec from an HR tech company that is helping employers develop abortion travel benefits, two execs from companies that have committed to offering such benefits and an attorney with more than 20 years of employee benefits experience.
A new benefit takes shape
On June 24 and the days following, HR software company Compt was inundated with requests for help from employers and benefits brokers. “[It was] a lot of fear and concern,” Amy Spurling, Compt’s founder and CEO, told HR Dive. Companies had “a lot of people on their teams that lost coverage immediately and don’t have access to care,” she said. They needed to design a legally compliant benefit that workers could use, and quickly.
While many companies by now have announced their unequivocal intention to support access to abortion care, the details have mostly been vague. A travel stipend seems to be the prevalent model emerging, with Citigroup and Dick’s among the early adopters of the benefit. According to reporting by The New York Times, Warner Bros., Disney, Meta, Bank of America and Intuit are among the many companies that have adopted the model. A common reimbursement limit appears to be $4,000, although Zillow said it would provide up to $7,500, the Times reported. Some companies have been more specific than others in what “travel” includes, noting the coverage for lodging and transportation or specifying the distance required to travel (over 50 miles, for example, in the case of JPMorgan Chase).
A handful of companies have taken even stronger or more specialized stances, based on the product or service they provide. Lyft and Uber, for example, reiterated their commitment to paying the legal fees of drivers sued for transporting people to abortion clinics — a benefit both adopted in September 2021, following the passage of the Texas Heartbeat Act, which allows anyone to sue a person who “aids or abets the performance or inducement of an abortion.” And Patagonia announced it would cover bail for those who peacefully protest.
Companies weigh legal liabilities
As businesses begin crafting coverage policies for abortion travel, there are important compliance issues they need to keep in mind. Employers need to maintain awareness of the types of expenses that are and are not taxable — a topic which gets thorny when it comes to medical care and abortion policy.
“Certain travel expenses relating to medical services are considered medical expenses under the Internal Revenue Code and can be covered under a group health plan,” Kirsten Vignec, a shareholder at Hill Ward Henderson who specializes in employee benefits law, told HR Dive via email. “If these permitted travel expenses are covered under a health plan there will not be any adverse tax consequences to the employee.” If reimbursements are provided outside of the health plan, Vignec said, “the amounts paid would likely be taxable to the employee.”
Regardless, even companies with fully insured health plans are subject to state insurance laws of the regulating state, Vignec noted. Just as abortion laws vary by state, so does coverage for abortion. “Some states prohibit the insured plans from providing benefits for abortion procedures,” Vignec said. “On the flip side, other states require that such coverage be provided.”
To be compliant, “companies with fully insured plans would likely have to set up a separate self-insured program to provide these types of travel benefits,” Vignec said, “such as a health reimbursement arrangement covering certain travel expenses for medical procedures that are unavailable in the state.
“For a variety of reasons, this type of arrangement would generally have to be limited to those covered under a comprehensive medical plan,” Vignec continued. “Companies with self-insured health plans are not subject to the state insurance laws, as they are covered by the Employee Retirement Income Security Act (ERISA), which preempts state laws regarding insurance and mandated coverage.”
Outside of taxation complications, some states have anti-abortion laws that could put companies that help employees secure out-of-state abortions in legal jeopardy. Texas and Oklahoma, for example, have these “aid and abet” provisions.
These provisions are top of mind for Spurling, who has been trying to help employers with workers in Texas craft a policy. “If the cousin of your employee found out about [use of abortion benefits] and was unhappy about it, they could come and sue you,” she said. “Anyone can sue anybody. They don’t even have to be party to the situation to be able to sue them. So it’s a very far-reaching law that has a lot of ramifications.”
Privacy concerns rise to the fore
In building a benefit that would help employees access care while also protecting their privacy, Compt decided broader would be better. It created an “out of state medical care stipend” — an annual $4,000 stipend that allows all employees to access a broad range of medical services, from fertility care to cancer treatments to abortion care. Employees may use the stipend to cover both the procedures themselves and for related expenses.
“You need to supply receipts for travel … if you need child care while you’re getting that treatment of whatever variety, you need to submit that,” Spurling said. “Those are things that are not illegal under any of the laws. For us, if you’re actually wanting to get reimbursed for actual treatment, we’re not requiring receipts for that because I don’t want to know what treatment you’re having.” She cited the potential for HIPAA violations and IRS tax-law noncompliance as the reasoning for Compt’s current benefit — as well as a desire to protect employee privacy.
“Regardless of what the situation is [in which] you may need an abortion, you know, there’s lots of scenarios where that may come into play … you certainly don’t want to be sharing that with your employer in any way, shape or form,” Spurling said.
Jack Altman, CEO of HR platform Lattice, shared on Twitter an internal message he’d sent to employees about the company’s intention to provide an abortion-access benefit. Cara Brennan Allamano, chief people officer, said leadership was currently developing the company’s abortion travel benefits policy, and exploring how to administer it “in a way that protects both our employees and the company.”
The San Francisco-based company has more than 700 employees, Allamano said, with 10% of those workers located in states with restrictive abortion laws either enacted or pending. “But as a fast-growing company, we know this number will likely increase over time,” she told HR Dive in an email.
Pam Goodwin, vice president of marketing at development coaching company AceUp, said the organization was also still working to develop its abortion-access benefit, but “privacy and the well-being, comfort and psychological safety of everyone at AceUp is top of mind for any policy that we develop.”
In adopting abortion-care benefits, company size also plays a role. Spurling noted that the privacy-protecting policy Compt developed will likely work much better for smaller companies. “It’s a lot easier to do the honor system [in a smaller company] than if you have 100,000 employees,” she said. “I think for companies that are, you know, less than 1,000 [employees] in particular, this is an easier place to get comfortable with an honor system.”
Employees respond positively
While company leaders who have rolled out abortion-access benefits — or announced the development of them — expected some pushback or negative responses from employees given the charged nature of the issue, all the leaders who spoke to HR Dive said the internal response has been overwhelmingly positive so far.
“There’s been no negative response at all,” Goodwin told HR Dive. “Even before this was announced … There was pretty immediate chatter [on Slack] about the decision before [CEO] Will Foussier even came out and said anything or any decisions were made about benefits, just discussing it as a news item.” When Foussier announced internally that the company would be providing support, “employees were immediately very grateful and supportive,” she said.
The response was similar at Lattice. “I believe our employees see this as an extension of our commitment to investing in their happiness and growth, both within Lattice and outside of it,” Allamano said.
Clouds gather on the horizon
As organizations work to craft abortion-access benefits, the ground will likely continue to shift under their feet. In early May, Texas state Rep. Briscoe Cain and 13 other state representatives sent an open letter to Lyft’s CEO that laid out a series of steps legislators would take to try to curtail the provision of abortion travel benefits.
“We will introduce legislation next session that bars corporations from doing business in the state of Texas if they pay for elective abortions or reimburse abortion-related expenses—regardless of where the abortion occurs, and regardless of the law in the jurisdiction where the abortion occurs,” the legislators wrote in their opening volley.
Vignec agreed that legislators across restrictive states would likely continue to pursue “additional legislation and subsequent litigation, as the states test their powers to address the issue of abortion restrictions and the response to those restrictions.”
Still, employers seem to be aware of the risks. “We are going in clear-eyed that it will be a bit of a moving target,” Allamano said.