Employers looking to provide safe harbor by covering workers’ out-of-state travel costs for abortion services must also navigate tax and benefits laws and consider employees’ potential tax burden, attorneys said.
Employers are preparing for an expected US Supreme Court decision invalidating Roe v. Wade, the 1973 decision that legalized abortion, by providing benefits to employees.
Six states, including California and New York, require abortion coverage in private health insurance plans, according to the Guttmacher Institute. Eleven states have laws that go the opposite direction, restricting insurance coverage of abortion in all private insurance plans written in the state, including those offered through health insurance exchanges established under the Affordable Care Act.
Adding travel coverage for medical purposes and reimbursing workers’ costs on a tax-free basis implicates benefit laws, said Edward Bernard, a benefits partner and shareholder with Hanson Bridgett in San Francisco. That means employers must contend with compliance issues under the Employee Retirement Income Security Act, Health Insurance Portability and Accountability Act, and the Consolidated Omnibus Budget Reconciliation Act, also known as COBRA.
“I think the main thing we’ve been hearing about is that employers are going to have to deal with this travel reimbursement,” Bernard said.
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