Employer Paid Travel Assistance for Interstate Abortion Access | Lowenstein Sandler LLP

Last week, the US Supreme Court was officially quashed Roe v. Wade in its ensuing decision, Dobbs v. Jackson Women’s Health Organization† With federal abortion protections lifted, many employers are considering how to help their employees who live in states where access to abortion is unavailable. Thoughts quickly turned to providing assistance to enable those workers to travel to a state where abortion is legal. Questions that arise include whether the provision of travel assistance for such a purpose is permitted, how travel assistance can be provided, whether and to what extent travel benefits are taxable, and how such a benefit can be provided while allaying an employee’s privacy concerns.

While the legal question of whether states can impose “travel bans” as a restriction remains unanswered, a number of states have meanwhile seen an increase in the number of non-residents crossing state lines to access the procedure. For example, after Texas banned almost all abortions six weeks after conception, Planned Parenthood reported that its clinics in neighboring states saw a nearly 800 percent increase in the number of abortion patients.

Recognizing that travel for an abortion isn’t financially or logistically feasible for everyone, several major employers, including Starbucks, Tesla, JPMorgan Chase, Meta, Dick’s Sporting Goods, Condé Nast and others, have announced plans to implement policies to cover travel expenses for workers who have to leave the state to access these health services. Lyft and Uber, in addition to expanding the company’s insurance coverage with “a range of reproductive health benefits, including termination of pregnancy,” have also pledged to reimburse their drivers’ legal costs if a driver is charged under state law for providing from transport to a clinic . The list of employers announcing plans to provide travel assistance and other benefits to help workers in restrictive states grows daily.

The map below shows in red the states that currently have full or partial bans on abortion.

An employer interested in providing abortion-related travel assistance to employees should consider the following.

Is it permissible to provide abortion-related travel assistance?

There are reports that some states are considering bans on interstate travel for an abortion, but at the time of writing, there appear to be no state laws that do this. Some reports have raised the prospect of a state enacting “assistance and incitement” criminal laws to penalize employers who pay the travel expenses of employees crossing state lines to access an abortion procedure. For several reasons, that possibility seems remote, but this is an evolving legal environment that needs to be monitored.

Reports also suggest that some states are considering banning health plans to cover abortion-related services. The Employee Retirement Income Security Act of 1974 (ERISA), the federal law that governs employee benefit plans, generally takes precedence over state laws to the extent that state law “applies to” an employee benefit plan. A majority of major employers have self-insured health insurance policies, which (unlike insured health insurance plans) take advantage of the benefits of pre-paid ERISA. So, to the extent that a state law claims to limit a self-insured health plan to covering abortion-related services, such law can be lifted by ERISA. Legal objections to state laws prohibiting travel to obtain an abortion are almost certain.

How can an employer provide abortion-related travel assistance?

An employer’s collective health plan is likely to cover certain transportation-related costs for medical care (including an abortion), regardless of whether coverage is provided under a fully insured or a self-insured plan. However, plans would be expected to have limitations on such coverage. While amounts paid under a group health plan for a “legal abortion” are excluded from income under the Internal Revenue Code (IRC) as medical care expenses, such amounts are subject to limits that are unlikely to cover the full cost of travel and will cover interstate accommodation. For example, the exclusion for out-of-home accommodation for the treatment of medical care is capped at $50 per night per person.

Given these limits, employers who have self-insured health plans may want to consider increasing reimbursement for abortion-related transportation under the plan. Employers who have fully insured health plans may consider establishing a supplemental reimbursement policy. However, benefits paid under a self-insured plan or supplemental benefit policy that exceed the IRC limits are treated as taxable income for the employee. An employer may consider increasing the compensation to also cover the employee’s taxes.

However, caution should be exercised when formulating a supplemental reimbursement policy because the supplement can be considered a separate group health plan subject to the requirements of ERISA, the Affordable Care Act (ACA) and other laws to which group health plans are subject. topic. Among other things, the ACA generally prohibits a group health plan from imposing annual and lifetime limits on benefit coverage. Employers setting up additional travel assistance schemes should consider avoiding such limits in the event that the scheme is considered a separate group health plan. As a result, employers should seek the advice of counsel when preparing and implementing a supplemental travel assistance plan or policy.

Employers who provide health insurance coverage through a professional employers’ organization (PEO) should match any additional travel allowances to the coverage of the PEO.

How can an employer protect the privacy of its employees when providing abortion benefits?

Well-meaning employers should be aware that employees may be hesitant to inform their employer that they need an abortion due to privacy concerns. Employee privacy could be compromised depending on how these travel benefits are incorporated into existing health plans. While companies may attempt to set a pre-determined reimbursement for abortion trips, there is no guarantee that this benefit will be seen separately from a health plan, as abortion is considered medical care.

In addition, the privacy protections afforded by the Health Insurance Portability and Accountability Act would not apply to data collected outside of a group health plan for abortion trips. For example, abortion providers may disclose health information about the procedure(s) provided to an employee to charge and collect the employer’s health plan payment. This can prevent many employees from taking advantage of these benefits for fear that their employer or others at the company will find out that they need an abortion. The federal Pregnancy Discrimination Act, the Americans with Disabilities Act, and the Family and Medical Leave Act of 1993, as well as some state laws, can generally protect employees from discrimination or retaliation by their employer regarding access to abortion. As of 2019, New York state law expressly prohibits employers from discriminating against their employees based on their sexual and reproductive health decisions.

The best way an employer can protect an employee’s privacy is to use a third-party service to manage abortion procedures. For example, it is reported that the Match company has established a fund that pays Planned Parenthood directly for all travel and lodging related to an abortion procedure. Handling this benefit through a third party or third-party administrator ensures employee privacy.

Should an employer who supplements abortion-related transport costs also reimburse similar costs for other medical treatments?

Employers who reimburse employees for interstate travel for abortion-related services should consider covering interstate travel for other medical treatments as well. The difference between most other health and abortion services, of course, is that the former are likely to be available in the state where the worker lives. However, there may be procedures (such as gender transition services) that are not available in a state or that will no longer be available in the future.

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