As we head into a new bargaining season, one issue that ICSOM negotiating committees might be inclined to bring to the table concerns employer assistance with access to abortion services. Since the Supreme Court’s decision in Dobbs v Jackson Women’s Health Organization that upended decades of (what was assumed to be) settled precedent regarding abortion rights, many employees, especially those in states that have imposed stringent restrictions on abortion, would like to see their employers provide assistance with travel expenses if it is necessary for the employee to go out-of-state to obtain an abortion. One might think this would be simple—our managements are largely sympathetic, so why not just negotiate a side letter saying the employer will reimburse travel and lodging expenses if reproductive care requires travel? Unfortunately, the reality is far more complicated.
The root of the problem is that the definition of “medical care” in IRS Code §213(d)(1)(B) includes “travel primarily for and essential to” the provision of health care services. In other words, a travel benefit or reimbursement program for employees obtaining medical care (including abortion services) is itself deemed to be “medical care.” If the employer offers such a program, then it is covered by the Employee Retirement Income Security Act of 1974 (or ERISA, the federal law covering employee benefits) as a group health plan, setting off a chain of hoops that employers need to jump through to offer such a benefit in compliance with the law.
The challenges are different depending on whether the employer has a self-funded or fully insured health care plan. In self-funded plans, the employer itself pays out medical claims; the plan is typically administered by an insurer like Blue Cross or Aetna, but the employer ultimately pays benefits. In a fully-insured plan, the employer contracts with an insurer to provide an off-the-shelf insurance plan for its employees; the insurer pays out the claims and charges the employer a monthly premium that is intended to bring in enough revenue to cover the cost of the claims (with some profit to the insurer, of course—this is America after all). Self-funded plans are more common among large employers, and only a handful of ICSOM orchestras have them—the vast majority of ICSOM orchestras administer fully-insured plans.
The distinction matters, because for a self-funded plan, the employer has far more flexibility to tailor benefits to match the needs of its employees. An employer can unilaterally amend a self-funded plan to offer a travel benefit for abortion services, subject to the risks involved (which are further discussed below). In contrast, an employer with a fully-insured plan has little control over the plan design and the benefits it offers, which are mostly determined by the insurer. In a state where abortion is illegal, it is virtually certain that a fully-insured plan will not offer any benefits related to abortion services, because no insurer wants to incur the legal risk. In that event, the employer would need to set up its own travel-benefit “health plan” to work in conjunction with the main plan. According to most experts, the best (or least-worst) way to do that is to set up a special Health Reimbursement Account (HRA) plan for purposes of providing the travel benefit.
HRAs, which must be integrated with the primary plan, have been around for a long time. Many ICSOM orchestras use them. For example, an orchestra can offer an HMO with a $2,000 deductible, but with an integrated HRA that reimburses claims up to $2,000 per year, effectively resulting in a $0 deductible. Essentially, the employer self-funds that first $2,000, and the plan kicks in after that.
But creating a new travel-benefit HRA leads to a host of other complexities. For example, HRAs don’t play nice with Health Savings Account (HSA) plans. An employee enrolled in an HSA-eligible plan that incorporates an HRA cannot make contributions to their HSA—and neither can the employer—until the deductible is met. That would have huge consequences for the many ICSOM musicians enrolled in HSA plans, because in many cases musicians have bargained for an employer contribution to offset the high deductible that is common to such plans. Musicians typically want to contribute their own money as well, to take advantage of the tax benefits of HSAs.
In addition, because an HRA is an employer-sponsored group health plan, it is subject to the mental health “parity rule” of the Affordable Care Act. An HRA plan that reimburses travel expenses only for abortion services would likely run afoul of the parity rule, which requires an equivalent benefit for mental health services. This is not insurmountable, though: the plan could likely comply with the parity rule if reimbursement was provided for travel in connection with any medical care (including mental health services) that is not available in the employer’s home area.
But it also may be difficult to find a third-party administrator that is willing to administer an HRA that potentially may pay for abortion-related travel in a state with strict abortion laws, due to the potential legal exposure. Yet another issue is that the IRS permits tax-free reimbursement for lodging in connection with medical care only up to $50 per night. Anything in excess of that is considered wages, which requires coordination with payroll and HR, which raises privacy concerns.
Further complicating the situation are the plethora of state laws targeted at anyone who helps a woman obtain an abortion. The most infamous is the Texas “bounty” law, which allows any person to sue and recover $10,000 from any other person who “aids and abets” an abortion—including by “paying or reimbursing the costs of an abortion through insurance or otherwise.” The law states that it applies even to those who merely “intend” to assist with an abortion. It is a shocking and bizarre piece of legislation that even the Supreme Court doesn’t know how to address—when the law came before the Court in December 2021, well before Dobbs was decided, the Court declined to take the case because the law was not enforceable by Texas state officials (only by private parties), so there was no one the Court could enjoin to prevent the law from taking effect.
Many questions arise, including the extent to which the law can be applied to persons outside of Texas and the scope of what it means to “aid and abet” an abortion. (Also note that this discussion covers travel benefits for in-person abortion services only; the option of using mifepristone and misoprostol pills, which can be obtained through the mail, implicates many other unsettled legal issues.) But it certainly raises the specter of an employer, the union, and negotiating committee members fighting lawsuits seeking a $10,000 bounty if they negotiate a travel reimbursement benefit for abortion services. Even if the reimbursement benefit did not mention abortion and covered any types of medical care not available locally, a lawsuit might be filed as soon as any employee uses the benefit to get an abortion—anti-abortion activists are not shy about litigating.
If this all sounds insane, well, it is. But Texas isn’t the only state headed in this direction—Oklahoma and Idaho have passed similar laws, and other states’ laws may impose criminal liability on those who assist with obtaining an abortion. Republican-appointed EEOC officials, both current and former, have also sent letters to employers warning them that they will face discrimination liability if they offer abortion-related benefits but do not offer equivalent benefits for pregnancy-related care.
There are defenses, of course. Employers could argue that ERISA preempts state laws outlawing abortion, though whether ERISA can preempt criminal laws is doubtful. One could also argue that a “right to travel” between states is inherent in the Constitution’s Privileges and Immunities clause, or that the Commerce Clause prohibits states from restricting the right to interstate travel. And in a bit of recent good news, the Texas law flunked its first test when a Texas state court held that the plaintiff bounty-hunter did not have standing to sue because they weren’t personally affected by the defendant doctor’s actions in providing an abortion. That decision will be appealed to more conservative higher courts, and at any rate leaves the door open for others who can show some kind of personal interest. The litigation is just beginning, and will keep lawyers employed for many years.
The bottom line is that if you want to go down this path with your employer, the union and the employer both need to extensively consult with their attorneys. Ideally, the employer’s attorney will do the heavy lifting, seeing as how the employer is the one that would need to set up and administer a travel-benefit plan. In the meantime, there are simpler options, including bargaining for a paid time off policy so that a musician can at least have the ability to travel to obtain an abortion, even if they are paying for it themselves.
So long as the policy is written to permit such time off for purposes of obtaining any kind of medical care that is not available locally and doesn’t explicitly mention abortion or reproductive rights, such a policy should not result in legal challenges (though in Texas, it is conceivable that someone might try to collect the $10,000 bounty if a musician indeed used the time off to obtain an abortion). The policy would also need to address privacy concerns, as a musician may not want to tell their management why they are using the time off.
Ironically, Justice Alito’s majority opinion in Dobbs suggests that the decision would finally put to rest decades of societal conflict over abortion. As it turns out, taking away a right that has been guaranteed for 50 years—one that a vast majority of the country wants to keep—does not produce a calming effect. The post-Dobbs world will likely be one of bitter and escalating conflict over this issue. Our workplaces are not immune.