Life Insurance

Roe v. Wade causes concern around benefits parity

The ruling raises the issue of benefits parity. Since the onset of the COVID-19 pandemic, the workforce has shifted to being largely or partially remote. As the workforce has migrated to different locations, potentially even different states, employers have had to think about cross-jurisdictional issues when determining employee benefits.

This is particularly challenging in the wake of Roe v. Wade. Abortion is now banned in at least eight states, and others expected to follow or at least introduce some restrictive legislation. According to Greenbaum, this “highly partisan” legal landscape has created “an incredible amount of confusion and concern for many employers” who’ve never had to reassess a substantial piece 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 states that are looking to ban access to abortion,” he said. “Then, they have to figure out the extent to which they’re going to try and create parity for their employees in different jurisdictions by providing a travel benefit.”

Read next: Roe v Wade: Corporate liability and D&O exposures abound

After the leak of the Roe v. Wade decision in May, companies of all sizes pledged to enhance their current employee benefits to cover abortion travel costs. For some employers, this meant making structural changes to their benefit plans, modifying their plan descriptions and benefit terms, and putting new travel benefit programs in place.

“Many employers are looking to provide access to healthcare that they’ve always provided to their workforce,” Greenbaum told Insurance Business. “But there are risks associated with this. Some jurisdictions consider supporting employees in travel as aiding and abetting the violation of a local regulation, so employers may be litigated against, while also facing potential boycotts or reputational damage.”

On Thursday, July 14, major sports retailer DICK’s Sporting Goods was hit with a federal civil rights complaint for introducing a special travel benefit of “up to $4,000” for employees, while allegedly 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 might face if they choose to help employees access healthcare services they may not be able to obtain in their state.

Read more: Out-of-state abortions – these insurance firms will support their staff…

Since Roe v. Wade was overturned, Greenbaum has fielded a surge of queries around potential changes to employee benefits plans. He said: “For most of our clients, the primary level is looking at: Is there a mechanism we can employ to protect our employees, and continue to provide them with access to reproductive health care? Once they’ve decided they’re going to provide a benefit (typically a travel benefit), they need to consider the downside risk for them as an employer, whether it’s the potential for litigation, the potential for discrimination, or concerns about reputational damage.

“Human resources departments are generally pretty clear about wanting to provide access to reproductive healthcare, but then it becomes a higher-level corporate decision about whether or not the exposure they endure as a result of this is acceptable. Risk management at the firm level, which typically is not involved in decisions about benefits, is becoming part of the picture.”

There’s a big division between fully-insured plans, where the employers purchase insurance from an insurance company, and self-insured plans, where the employers provide health benefits directly to employees. Unlike fully-insured plans that are governed by state insurance regulations, self-insured plans are governed by the Employee Retirement Income Security Act of 1974 (ERISA). This means employers with self-funded medical benefits are not required to comply with state insurance laws.

“They’re treating this issue very differently,” Greenbaum commented. “When employers are large enough to be self-insured, they have a lot more flexibility in the way they choose to deal with [reproductive healthcare and abortion travel costs].”

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