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Legal clashes await U.S. companies to cover workers’ abortion costs

Written by Javed Iqbal

Proponents of abortion rights protest outside the U.S. Supreme Court the day after the U.S. Supreme Court ruled in the Dobbs Abortion case against the Women’s Health Organization and overturned the landmark Roe v Wade abortion decision in Washington, USA, June 25, 2022. REUTERS / Elizabeth Frantz

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June 26 (Reuters) – A growing number of large U.S. companies have said they will cover travel expenses for employees who have to leave their home states to have an abortion, but these new policies could expose companies to lawsuits and even potentially criminal liability, he said. legal experts.

Amazon.com Inc (AMZN.O)Apple Inc. (AAPL.O)Lift Inc (LYFT.O)Microsoft Corp (MSFT.O) and JPMorgan Chase & Co (JPM.N) was among companies announcing plans to provide these benefits through their health insurance plans in anticipation of Friday’s U.S. Supreme Court ruling that overturned the 1973 landmark Roe v. Wade ruling that had legalized abortion nationwide. Read more

Within an hour of the decision being released, Conde Nast CEO Roger Lynch sent a note to staff announcing a travel allowance policy, calling the court’s decision “a crushing blow to reproductive rights.” Walt Disney Co (DIS.N) revealed a similar policy on Friday that tells employees it recognizes the impact of the abortion verdict but remains committed to providing comprehensive access to high-quality health care, according to a spokesman. Read more

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Companies, including the health insurance company Cigna Corp (CI.N)Paypal Holdings Inc (PYPL.O)Alaska Airlines Inc [RIC:RIC:ALKAIR.UL] and Dick’s Sporting Goods Inc (DKS.N) also announced reimbursement policies on Friday.

Abortion restrictions already on the books in 13 states went into effect following Friday’s ruling, and at least a dozen other Republican-led states are expected to ban abortion.

The court’s ruling, driven by its conservative majority, upheld a Mississippi law banning abortion after 15 weeks. Meanwhile, some democratically-led states are moving to strengthen access to abortion.

Companies will have to navigate the patchwork of state laws and are likely to provoke anger among anti-abortion groups and Republican-led states if they adopt policies that support employees who have abortions.

Texas state lawmakers have already threatened Citigroup Inc (CN) and Lyft, which had previously announced travel reimbursement policies, with legal implications. A group of Republican lawmakers said in a letter last month to Lift CEO Logan Green that Texas “will take swift and decisive action” if the company implements the policy.

Legislators also outlined a number of abortion-related proposals, including a bill that would prevent businesses from doing business in Texas if they pay for state residents to have abortions elsewhere.

GUIDELINES TRUDER

It’s probably only a matter of time before companies face lawsuits from states or anti-abortion advocates who claim that abortion-related payments violate the state’s ban on facilitating or aiding in abortions, according to Robin Fretwell Wilson, law professor at University of Illinois and health law expert.

“If you can sue me as a person for carrying your daughter across state borders, you can sue Amazon for paying for it,” Wilson said.

Amazon, Citigroup, Lyft, Conde Nast, and several other companies that have announced refund policies did not respond to requests for comment.

For many large corporations that fund their own health care schemes, the federal law governing employee benefits will provide crucial coverage in civil litigation over their reimbursement policies, several attorneys and other legal experts said.

The Employee Retirement Income Security Act of 1974 (ERISA) prohibits states from enacting requirements that “relate to” employer-sponsored health care plans. For decades, courts have interpreted that language to prevent state laws from dictating what health plans can and cannot cover.

ERISA regulates benefit schemes that are financed directly by employers, known as self-insured schemes. By 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 a claim for reimbursement for abortion travel is likely to cite ERISA as a defense, according to Katy Johnson, senior health policy adviser at the American Benefits Council, a trade group. And that would be a strong argument, she said, especially for companies with general reimbursement policies for necessary medical-related travel rather than those that secrete abortion.

Johnson said reimbursements for other forms of medical-related travel, such as visits to hospitals designated as “centers of excellence,” are already common, although abortion-related policies are still relatively rare.

“While this may seem new, it is not in the general sense and the law is already telling us how to deal with it,” Johnson said.

BORDERS

The argument has its limits. Fully insured health schemes, where employers buy coverage through a commercial insurance company, cover about a 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 law, such as those in multiple states that make it a crime to assist and remedy abortion, so employers who adopt reimbursement policies are vulnerable to criminal prosecution by state and local prosecutors.

But since most criminal abortion laws have not been enforced in decades since Roe was convicted, it is unclear whether officials would try to prosecute companies, according to Danita Merlau, a Chicago-based lawyer who advises companies on benefits.

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Reporting by Daniel Wiessner in Albany, New York, Editing by Alexia Garamfalvi and Grant McCool

Our standards: Thomson Reuters Trust Principles.

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Javed Iqbal

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