Many employers are promising abortion travel benefits. How will they work?

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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.”

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