Considerations for Employers Providing Travel Benefits for Abortion Procedures

Allen Smith, J.D. By Allen Smith, J.D. June 29, 2022
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Considerations for Employers Providing Travel Benefits for Abortion Procedures

​Employers that are providing travel benefits for abortion procedures have a number of things to consider, including the reputational risks of providing such benefits. Many employers are quietly making these benefits available, despite the unclear legality of doing so.

Some companies have been public about providing travel benefits, but this is just the tip of the iceberg, according to Ben Conley, an attorney with Seyfarth in Chicago. Provision of such benefits is happening more broadly than is apparent from the news, he said during a Society for Human Resource Management webcast June 28 on Dobbs v. Jackson Women's Health Organization, the recent Supreme Court decision that overturned Roe v. Wade

Multistate companies that are providing travel benefits for abortion procedures are trying to ensure that everyone under their health insurance plan has the same level of services, he added.

Employers providing travel benefits for abortion procedures may rely in part on Justice Brett Kavanaugh's concurrence in Dobbs. In his concurrence, Kavanaugh said a state may not bar one of its residents from traveling to another state to obtain an abortion.

The three liberal justices on the court, along with Chief Justice John Roberts Jr., might agree with Kavanaugh on this issue should the court face it, Conley said. As a result, he predicted, a law barring a state resident from traveling to another state to obtain an abortion might one day be ruled unconstitutional by the Supreme Court.

Questions for Employers

It's not novel to provide a travel benefit under a health plan, Conley said, adding that most employers provide it already.

For a travel benefit, some employers are considering the scope of the benefit, such as whether it covers in vitro fertilization (IVF). IVF could run afoul of state laws, Conley cautioned. As noted in Reason, "Under current practice, patients of IVF clinics generally choose to create numerous embryos for possible implantation. As fertility treatments proceed, embryos are often discarded when pre-implantation genetic diagnosis indicates significant inheritable maladies or after patients have completed their families."

Some employers are discovering that their health plans do not cover so-called elective abortions but instead cover only nonelective abortions, Conley said. Nonelective abortions include situations where the health and life of the pregnant woman is endangered. Sometimes, the term is defined to include situations where a woman was impregnated by rape or incest. The first question for these employers is whether they should cover elective abortions, he noted.

Another question is whether the plan covers abortifacients, which are drugs that cause abortions. Many employers are revisiting the extent to which they cover abortifacient drugs, Conley said.

Access to abortifacient drugs through telehealth may not be a long-term option in states restricting abortion access, as more states are starting to limit access to abortifacients, he said.

Some employers are relying on employee assistance programs, while others are considering payroll reimbursement for abortion-travel expenses. However, using payroll reimbursement could inadvertently be setting up a new medical plan, and some employers are uncomfortable with the tax implications.

If the travel benefit is in the health plan, it can be provided on a tax-free basis with some limitations, Conley noted. Travel reimbursements, such as airfare and cab rides, as well as mileage capped at 18 cents per mile, are allowed. So are hotel costs capped at $50 per day, he said. Meals aren't eligible unless someone is in the hospital, Conley added, noting that abortion typically is an outpatient procedure. If a companion is needed, their travel costs may be covered, also capped at $50 per day for hotel costs.

Some employers provide travel benefits beyond what's covered on a tax-free basis and then impute the income, Conley noted.

State tax law can diverge from federal tax law, he noted.

Risks

Providing travel benefits for abortions isn't without risks, Conley cautioned. These risks include:

  • Civil liability.
  • Criminal liability.
  • Political retribution.
  • Reputational harm.

Nonetheless, Conley said there may be some protection from civil liability due to pre-emption under the Employee Retirement Income Security Act (ERISA), where applicable. Self-insured companies are subject to ERISA rather than state law. 

As for criminal liability, he pointed again to Kavanaugh's concurrence as providing legal support for employer abortion-travel benefits.

In addition, Conley noted that there is the risk of being pressured by shareholders to provide travel benefits for abortions.

"Employers need to remain nimble," he stated.

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