Legal clashes await US companies to cover workers’ abortion costs

June 27 (Reuters) – A growing number of large US companies have said they will cover travel expenses for employees who have to leave their home states to have an abortion, but these new guidelines could expose companies to lawsuits and even potential criminal liability, said legal experts.

Amazon.com Inc (AMZN.O), Apple Inc (AAPL.O), Lyft Inc (LYFT.O), Microsoft Corp (MSFT.O) and JPMorgan Chase & Co (JPM.N) were among the companies that announced plans for to provide these benefits through its health insurance plans pending Friday̵[ads1]7;s U.S. Supreme Court decision overturning the 1973 landmark Roe v. Wade ruling that had legalized abortion across the country. read more

Within an hour of the decision being released, Conde Nast CEO Roger Lynch sent a note to employees announcing a travel reimbursement policy, calling the court’s ruling “a crushing blow to reproductive rights.” Walt Disney Co. (DIS.N) unveiled a similar policy on Friday, telling employees that they recognize the impact of the abortion order but are still committed to providing comprehensive access to high-quality health care, according to a spokesman. read more

Health Insurance Company Cigna Corp (CI.N), Paypal Holdings Inc (PYPL.O), Alaska Airlines Inc and Dick’s Sporting Goods Inc (DKS.N) also announced a refund policy on Friday.

Abortion restrictions already in place 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 ruling, driven by the Conservative majority, upheld a Mississippi law banning abortion after 15 weeks. Meanwhile, some democratically-led states are moving to strengthen access to abortion.

Businesses will have to navigate the patchwork of state laws and are likely to irritate anti-abortion groups and Republican-led states if they adopt policies that support abortion workers.

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

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

CLAIMS ARE OVER

It is probably only a matter of time before companies face lawsuits from states or anti-abortion advocates who claim that abortion-related payments violate government bans on facilitating or assisting with abortions, according to Robin Fretwell Wilson, a law professor at the University of Illinois and health law expert.

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

Amazon, Citigroup and other companies that have announced refund policies did not respond to requests for comment. A spokesman for Lyft said: “We believe access to healthcare is crucial, and transport should never be a barrier to this access.”

For many large companies that fund their own health plans, the federal law that regulates employee benefits will provide crucial coverage 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. For decades, courts have interpreted this language to prevent state laws from dictating what health plans can and cannot cover.

ERISA regulates benefit plans that are financed 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 for reimbursement claims for abortion travel is likely to cite ERISA as a defense, according to Katy Johnson, senior health policy adviser at the American Benefits Council. And that would be a strong argument, she said, especially for companies with general reimbursement policies for necessary medical-related travel instead of those that separate abortion.

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

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

BOUNDARIES

The argument has its limits. Fully insured health plans, 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 American companies 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 several states that make it a crime to assist and remedy abortion. So employers who adopt reimbursement policies are vulnerable to criminal charges 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 benefit issues.

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

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