Legal clashes await U.S. companies covering workers' abortion costs
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[June 27, 2022]
By Daniel Wiessner
(Reuters) -A growing number of large U.S.
companies have said they will cover travel costs for employees who must
leave their home states to get abortions, but these new policies could
expose businesses to lawsuits and even potential criminal liability,
legal experts said.
Amazon.com Inc, Apple Inc, Lyft Inc, Microsoft Corp and JPMorgan Chase &
Co were among companies that announced plans to provide those benefits
through their health insurance plans in anticipation of Friday's U.S.
Supreme Court decision overturning the landmark 1973 Roe v. Wade ruling
that had legalized abortion nationwide.
Within an hour of the decision being released, Conde Nast chief
executive Roger Lynch sent a memo to staff announcing a travel
reimbursement policy and calling the court's ruling "a crushing blow to
reproductive rights." Walt Disney Co unveiled a similar policy on
Friday, telling employees that it recognizes the impact of the abortion
ruling but remains committed to providing comprehensive access to
quality healthcare, according to a spokesman.
Companies including health insurer Cigna Corp, Paypal Holdings Inc,
Alaska Airlines Inc and Dick's Sporting Goods Inc also announced
reimbursement policies on Friday.
Abortion restrictions that were already on the books in 13 states went
into effect as a result of Friday's ruling and at least a dozen other
Republican-led states are expected to ban abortion.
The court's decision, driven by its conservative majority, upheld a
Mississippi law that bans abortion after 15 weeks. Meanwhile, some
Democratic-led states are moving to bolster access to abortion.
Companies will have to navigate that patchwork of state laws and are
likely to draw the ire of anti-abortion groups and Republican-led states
if they adopt policies supportive of employees having abortions.
State lawmakers in Texas have already threatened Citigroup Inc and Lyft,
which had earlier announced travel reimbursement policies, with legal
repercussions. A group of Republican lawmakers in a letter last month to
Lyft chief executive Logan Green said Texas "will take swift and
decisive action" if the ride-hailing company implements the policy.
The legislators also outlined a series of abortion-related proposals,
including a bill that would bar companies from doing business in Texas
if they pay for residents of the state to receive abortions elsewhere.
LAWSUITS LOOMING
It is likely only a matter of time before companies face lawsuits from
states or anti-abortion campaigners claiming that abortion-related
payments violate state bans on facilitating or aiding and abetting
abortions, according to Robin Fretwell Wilson, a law professor at the
University of Illinois and expert on healthcare law.
"If you can sue me as a person for carrying your daughter across state
lines, you can sue Amazon for paying for it," Wilson said.
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Abortion rights supporters protest outside the U.S. Supreme Court
the day after the United States Supreme Court ruled in the Dobbs v
Women's Health Organization abortion case, overturning the landmark
Roe v Wade abortion decision, in Washington, U.S., June 25, 2022.
REUTERS/Elizabeth Frantz
Amazon, Citigroup, Lyft, Conde Nast and several other
companies that have announced reimbursement policies did not respond
to requests for comment.
For many large companies that fund their own health plans, the
federal law regulating employee benefits will provide crucial cover
in civil lawsuits over their reimbursement policies, several lawyers
and other legal experts said.
The Employee Retirement Income Security Act of 1974 (ERISA)
prohibits states from adopting requirements that "relate to"
employer-sponsored health plans. Courts have for decades interpreted
that language to bar state laws that dictate what health plans can
and cannot cover.
ERISA regulates benefit plans that are funded directly by employers,
known as self-insured plans. In 2021, 64% of U.S. workers with
employer-sponsored health insurance were covered by self-insured
plans, according to the Kaiser Family Foundation.
Any company sued over an abortion travel reimbursement requirement
will likely cite ERISA as a defense, according to Katy Johnson,
senior counsel for health policy at the American Benefits Council, a
trade group. And that will be a strong argument, she said,
particularly for businesses with general reimbursement policies for
necessary medical-related travel rather than those that single out
abortion.
Johnson said reimbursements for other kinds of medical-related
travel, such as visits to hospitals designated "centers of
excellence," are already common even though policies related to
abortion are still relatively rare.
"While this may seem new, it's not in the general sense and the law
already tells us how to handle it," Johnson said.
LIMITS
The argument has its limits. Fully-insured health plans, in which
employers purchase coverage through a commercial insurer, cover
about one-third of workers with insurance and are regulated by state
law and not ERISA.
Most small and medium-sized U.S. businesses have fully-insured plans
and could not argue that ERISA prevents states from limiting
abortion coverage.
And, ERISA cannot prevent states from enforcing criminal laws, such
as those in several states that make it a crime to aid and abet
abortion, so employers who adopt reimbursement policies are
vulnerable to criminal charges from state and local prosecutors.
But since most criminal abortion laws have not been enforced in
decades, since Roe was decided, it is unclear whether officials
would attempt to prosecute companies, according to Danita Merlau, a
Chicago-based lawyer who advises companies on benefits issues.
(Reporting by Daniel Wiessner in Albany, New York, Editing by Alexia
Garamfalvi and Grant McCool)
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