Employers could find themselves in the crosshairs of state efforts to crack down on abortion in the wake of the landmark US Supreme Court ruling eliminating federal guarantees for abortion rights.
Many large companies, including
But state laws in Oklahoma and Texas that prohibit assisting somebody to get an abortion, as well as the potential for copycat or other versions of anti-abortion legislation in red states, threaten legal risks for employers and their executives who actively support abortion access for their employees.
1. Can states ban companies from paying for travel?
States could face legal limits to their authority in this area, particularly federal preemption under the Employee Retirement Income Security Act.
ERISA prevents states from regulating employers’ group health plans—where medical-related travel assistance often resides—but that preemption applies only to self-funded plans, which are mostly used by large employers. The fully insured plans that smaller employers often use are generally subject to state regulation.
But as for employers’ abortion assistance benefits, “this is all very new. Nothing like this has been tested yet in the context of ERISA preemption,” said Jennifer B. Rubin, an employment lawyer with Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
The travel assistance benefits generally apply to employees as well as their dependents because most companies are offering them as part of their health insurance plans, said Katy Johnson, senior counsel for health policy at the American Benefits Council.
Justice Brett Kavanaugh threw cold water on the idea of states limiting out-of-state travel in his concurring opinion to the June 24 Dobbs v. Jackson Women’s Health Organization ruling because of the constitutional right to interstate travel. But one Texas state legislator, Rep. Briscoe Cain (R), countered in a tweet that the Constitution doesn’t include a right to pay for someone’s interstate travel.
Cain is leading a group of Texas lawmakers proposing ways to make it easier for the state to prosecute companies that help people get out-of-state abortions—ideas that the group outlined in a May 6 letter to
2. How else might states go after companies backing abortion access?
The Texas legislators’ letter outlined a handful of strategies that could heighten the legal risk for companies and their executives.
These included proposals to bar companies from doing business in Texas if they pay for abortion-related expenses, empowering companies’ shareholders to sue the executives and directors for breach of fiduciary duty, and imposing felony criminal liability on executives who opt to use company money to pay for abortion-related expenses without first getting approval from all company shareholders.
Other conservative states haven’t been so specific about whether or how they might take on employers actively supporting abortion rights.
South Dakota’s Gov.
3. Can employers face liability under existing laws?
While many states have laws that prohibit abortion, the bounty measures in Texas and Oklahoma most clearly target employers. They allow citizens to sue anyone who “aids and abets” an abortion as early as six weeks into a pregnancy, which includes “paying for or reimbursing the costs of an abortion through insurance or otherwise.”
Courts will have to decide whether that applies to an employer funding an out-of-state abortion, although state authority typically ends at its borders. Some Texas Republicans seem to think the law does apply to such funding, lashing out at
The Texas law has proved difficult to challenge in court. The US Supreme Court ruled in December that the only valid defendants to a legal challenge were state licensing officials. The Texas Supreme Court, which has the last word on interpreting state law, held in March that those officials can’t be sued because they don’t enforce the law.
4. What about paying for abortion medicine?
If states criminalize the use of medication to end pregnancies, then employers with health plans that cover the cost of those drugs could face prosecution as an accessory when workers use them.
The Biden administration has said states can’t ban the drug because it’s been deemed safe and effective by the Food and Drug Administration, though states may seek other paths to block its use.