For many employers, their healthcare benefits include access to pregnancy termination procedures, or abortions.  The right to abortions was decided in a 1973 case called Roe v. Wade. The case was controversial for multiple reasons, but the crux of it is that the U.S. Supreme Court struck down a Texas statute banning abortion, effectively legalizing the procedure across the United States. Before the decision, abortion had been illegal throughout much of the country forcing many women to have back door alley procedures, which could lead to further medical complications including death.

A major reason for the controversy is that the opinion divided pregnancy into three trimesters. During the first trimester, the decision was up to the woman.   In the second trimester, the government could regulate abortion but not ban.  In the third trimester, the state could prohibit abortion to protect a fetus that could survive on its own outside the womb, except when a woman’s health was in danger.

In 1992, the Supreme Court heard the case called Planned Parenthood of Southeastern Pennsylvania v. Casey. In that case, Roe was upheld, but the court allowed states to pass more restrictions as long as they did not pose an “undue burden."

The current case before the Supreme Court is Dobbs v. Jackson Women’s Health Organization.  The question before the Supreme Court is whether Mississippi could ban most abortions after 15 weeks of pregnancy.   A first draft of the Court’s decision, around 98 pages or so, however it occurred, was leaked to the public.  The decision in a nutshell essentially overturned Roe v. Wade and would make it a state-by-state decision as to abortion legality.

Assuming this is the final decision, 22 states have laws or constitutional amendments that would take effect immediately or as soon as possible to ban abortion.  In addition, Florida, Indiana, Montana, and Nebraska may likely ban abortion as soon as possible without federal protections. 16 states and the District of Columbia have laws that protect the right to abortion.

Michigan has a Pre-Roe ban, a 1931 law. It is one of the most restrictive and allows for no exceptions. Given the make-up of Michigan legislature, it is unlikely to have a law that would overturn that ban.  Since enforcement is by the executive branch, a possible outcome could be the lack of enforcement of the law. Michigan Attorney General Dana Nessel has already said she would not enforce it believing it to be unconstitutional, although some local prosecutors have stated that they would prosecute. A case could be brought to the Michigan Supreme Court, who, with a democratic majority, could overturn the ban.  If so, with the current make-up of Michigan’s government, it is unlikely that a new law banning abortion would survive a governor veto.  But if parties change, a ban of some sort could again come into effect. 

There is a movement to get a law that would overturn the 1931 law on the November ballot, which would need 425,000 signatures.

The Hyde Amendment bars federal health care providers from covering abortions altogether and is unlikely to be overturned legislatively or otherwise.

Given the likelihood of the decision outcome, Michigan employers will have to think what the benefit packages should look like, especially as women are becoming the majority of the workforce.  Even with abortion bans, it may not limit the benefits of these services.  Blue Cross of Michigan offers these benefits currently in their healthcare packages. It has not stated what would happen if Roe is overturned, but criminal liability could attach to the company by offering these benefits.  A number of employers are considering travel expenses as part of the healthcare expenses, if an employee travels to another state where the procedure is legal.  However, the question then becomes whether that would include companion expenses as well, and what time-off policy and distance and cost guidelines would be allowed. Illinois is the closest state that protects the right to abortion.  

Further, employers will have to review contraceptive costs as well.  Although covered by healthcare policies now, some states will likely pass laws prohibiting types of contraceptives that act after conception, for example the IUD, birth control shots, and the morning-after pill.  Others may ban contraceptives entirely.  States could also ban vasectomies and other birth control that men could take. Moreover, some states could ban prescriptions from being shipped into the state.  Some states have proposed laws that would prohibit shipping abortifacient drugs to employees or impose liability on those who assist with travel arrangements.   

ERISA, under these circumstances, arguably would not override state laws that only have an indirect impact on ERISA plans. In addition, the use of HSAs to assist the payment of costs may not be a tax-free event.  Finally, Section 213(d) of the IRS code generally excludes amounts expended for illegal operations or treatments.

Assuming the benefits are provided, this gets even trickier if the same rights are not provided to men, same-sex couples, and trans women – among others. This could lead to discrimination claims, given the Supreme Court’s decision in the recent Bostock case which ruled that Title VII definition of sex includes LGBTQ.  And for those employers who rely on a low skilled, low pay workforce, the ban especially impacts those at the lower ends of economic spectrum.  Given the dearth of workers now, and the low unemployment rate, recruiting and retention costs for those employers will necessarily go up.  Moreover, if employers are not proactive, in this pro-union environment, it could be an awakening call for unions to organize more workers who will demand these benefits as a normal course of business. 

Overall, employers will have to consult with their legal counsels regarding whether they could face potential liability based on services covered under their health plans and any additional benefits they may offer.  This liability may include criminal penalties such as aiding and abetting a crime, and it may extend to the person(s) who authorized the policy and benefits to support abortion.  Until a decision is handed down, employers should be working with legal counsel and planning as if the current draft will be the indicator of the future.

Source:  Seyfarth Shaw 5/5/22, ABA 5/4/22, Crains Detroit Business, 5/3/22 USA Today 5/4/22, CNN 12/8/21, History.com 3/27/18