Threat of criminal charges changes health plans' abortion considerations

Major brands like Starbucks, Tesla, and Amazon have doubled down on promises to continue abortion coverage in the wake of the U.S. Supreme Court overturning Roe v. Wade, including covering travel for employees in states with bans.

• But the way some states are threatening criminal charges for facilitating the procedure could give plenty of other employers pause, potentially creating a confusing patchwork of benefits and gaps in employer-sponsored care.

Why it matters: It's not entirely clear how things will shake out for some of the 155 million non-elderly Americans who get health coverage through their jobs, adding a new wrinkle into an already turbulent job market.

What they're saying: "It seems there is an open question with criminal charges and whether these (policies) would be considered aiding someone who is getting an abortion," Joelle Abramowitz, a University of Michigan economist who studies health insurance, told Axios.

• "The only way we're going to really find this out is to have these laws in place and have them be challenged and have this go through the legal system," she said.

State of play: Self-funded health plans — which most large companies have — are regulated by the federal law known as ERISA which pre-empts state laws that regulate benefits.

• Yes, but: Businesses that offer coverage through the purchase of insurance — typically smaller employers — still are subject to state insurance laws and rules, according to the Society for Human Resource Management.

Between the lines: A company likely can't get in trouble just for having a policy to cover abortion or associated travel costs. But it's possible the employer could be compelled to share information as part of a criminal investigation.

• “HIPAA may not act as a shield in protecting patient and plan information if the plan is confronted with a subpoena or a court order in connection with legitimate state law enforcement activity," said Seth Perretta, an attorney at Groom Law Group, who advises employers and health insurers.
• Travel reimbursements that exceed IRS limits could also jeopardize patient privacy.
• "The excess amounts will generally be taxable income to the employee," Perretta said. "As a result, additional company actors may need to be involved, such as the payroll department, which in turn, could increase the risk of exposure of potential private employee information."

Zoom in: Small- and mid-sized companies are only starting to suss out the pitfalls.

• For example, Chili Piper, a tech startup in Brooklyn, has employees working remotely in nearly every state.
• The company created a $4,000 benefit to cover travel, accommodations and other costs connected with out-of-state reproductive or trans-affirming health care, said Tyler Parson, the company's vice president of people.
• Now, it's in conversations with Planned Parenthood about an arrangement in which the health organization would send Chili Piper anonymized bills for reproductive care rendered to ensure confidentiality.

Don't forget: Many employers have just emerged from two years of intense activity navigating COVID-19 workplace standards and vaccination requirements.

• Many may now have to overhaul benefits, paid leave policies and privacy practices if half of the states restrict abortion.

The bottom line: Some employers have made bold statements in the aftermath of the Supreme Court ruling.

• But, but, but:"I wouldn't be surprised to see some employers stop covering abortion given that potential risk," Abramowitz said.