The decision raises the issue of parity of benefits. Since the start of the COVID-19 pandemic, the workforce has shifted to a largely or partially remote workforce. As the workforce has migrated to different locations, potentially even to different states, employers have had to consider cross-jurisdictional issues when determining employee benefits.
This is particularly challenging as a result of Roe v. Wade. Abortion is now banned in at least eight states, and others are expected to follow or at least introduce some restrictive legislation. According to Greenbaum, this “heavily biased” legal landscape has created “an incredible amount of confusion and concern for many employers” who have never had to reevaluate a significant portion of their health benefits.
“First, they have to make an initial decision about whether or not they intend to provide reproductive health services to their employees in countries that want to ban access to abortion,” he said. “They then have to figure out to what extent they’re going to try to create parity for their employees in different jurisdictions by providing travel allowance.”
Read the following: Roe v. Wade: Corporate liability and D&O exposures abound
After the expiration of Roe v. Wade decision in May, companies of all sizes pledged to increase their current employee benefits to cover abortion travel costs. For some employers, this meant making structural changes to their benefit plans, changing their plan descriptions and benefit terms, and introducing new travel benefit programs.
“Many employers are looking to provide access to the health care they’ve always provided to their workforce,” Greenbaum told Insurance Business. “But there are risks involved. Some jurisdictions consider supporting employees to travel as aiding and abetting a violation of a local regulation, so employers can be sued while facing potential boycotts or reputational damage.”
On Thursday, July 14, sporting goods retailer DICK’s Sporting Goods was hit with a federal civil rights complaint for implementing a special travel benefit of “up to $4,000” for employees while failing to provide equivalent paid maternity care. According to a National Review Report, the complaint was filed by America First Legal (AFL) with the US Equal Employment Opportunity Commission (EEOC), alleging multiple violations of Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on parental status.
This is just one example of the variety of consequences employers can face if they choose to help employees access health care services they may not be able to obtain in their state.
Read more: Out-of-State Abortions – These Insurance Companies Will Support Their Staff…
From Roe v. Wade was canceled, Greenbaum fielded a flurry of inquiries about potential changes to employee benefit plans. He said: “For most of our clients, the basic level is looking at: Is there a mechanism we can use to protect our employees and continue to give them access to reproductive health care? Once they decide they will provide compensation (usually travel compensation), they need to consider the downside risk to them as an employer, whether that’s the potential for litigation, the potential for discrimination, or concerns about reputational damage.
“HR departments are generally pretty clear about their desire to provide access to reproductive health care, but then it becomes a corporate decision at a higher level as to whether the exposure they take as a result is acceptable or not.” Risk management at the company level, which is not normally involved in benefits decisions, becomes part of the picture.”
There is a big divide between fully insured plans, where employers buy insurance from an insurance company, and self-insured plans, where employers provide health benefits directly to employees. Unlike fully insured plans, which are governed by state insurance regulations, self-insured plans are governed by the Employee Retirement Income Security Act of 1974 (ERISA). This means that employers with self-funded medical benefits are not required to comply with state insurance laws.
“They treat this problem very differently,” Greenbaum commented. “When employers are large enough to self-insure, they have much more flexibility in how they choose to deal with [reproductive healthcare and abortion travel costs].”