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How the Reversal of Roe v. Wade May Affect Your Small Business

How the Reversal of Roe v. Wade May Affect Your Small Business

Have you considered how the Reversal of Roe v. Wade may affect your small business? Regardless of your personal views on abortion, you need to know how your business may be affected by the reversal of Roe v Wade.  After all, this ruling affects roughly half of the American workforce. It poses a potential recruitment and retention crisis in certain states. It’s an evolving situation, especially in regards to the right to privacy and what HIPPA protects and does not protect in this new era.   

Statistics say that roughly 1 out of every 4 women will have an abortion at some point in their lives.  If women no longer have access to this procedure, then – you guessed it – many more women will be having babies in the future. And what does that mean in the business world? Women, especially those in hourly jobs, will struggle to advance in their positions. Additionally, businesses will need to do more to provide work environments that support mothers and families.  

My fellow entrepreneurs: are you prepared? Consider the following, especially if you live in a state that has banned or limited abortion.

I offer insurance for my employees. How is my biz impacted? 

If you offer insurance, does it cover abortion? What if the employee has to travel to another state to obtain it? Does it offer dependent-care flexible spending accounts?   

If your insurance is part of a nationwide network, then you very likely don’t need to worry about coverage. However, since the states are regulating access to the procedure, you will need to know if you are in a state that bans or limits abortion.

Fully-insured plans

For fully-insured plans (where employers purchase group health insurance through an insurance carrier), coverage of reproductive services, including abortion, will depend on state insurance law. Self-insured plans have greater flexibility regarding coverage. They can generally choose to offer coverage for abortion services or to limit the coverage to specific circumstances. 

Abortion coverage has always been highly dependent on where your business operates and what type of plan you have. It is dictated by the laws of the state from which the policy is issued – not the state of residence of the employee. For example, consider a California employer with a California-issued medical policy that covers an employee residing in Oklahoma. That employee will continue to have the full coverage of the California-issued policy. But since the employee’s residence is in Oklahoma, she will not have easy access to abortion care or services. 

For some employers, this means that abortion will not be a covered service in their health plan. Employers that want to ensure abortion is a covered service may need to consider adding access to a wider or national coverage network. Alternatively, employers could choose to reimburse employees for out-of-network expenses through HRA (Health Reimbursement Arrangement) options.  

Self-insured medical plans

Self-insured medical plans (where the employer pays for its employees’ health claims out-of-pocket) are exempt from the majority of state insurance mandates. These are regulated by the federal government under the Employee Retirement Income Security Act, orERISA. Because self-insured medical plans are not governed by any state’s insurance code, these plans can be designed to cover abortion services to any extent the plan sponsor wishes. If you are self-insured, you will want to speak with your plan provider to find out what’s covered.   

Will you support your female employees if they must travel to another state in order to get an abortion? 

Costs associated with traveling for abortion, such as lodging (not at a hospital or treatment facility), may also be considered a qualified medical expense. To offer reimbursement on a pre-tax basis, the employer will need to set up an HRA through which to run the reimbursement. Unless structured as an Excepted Benefit HRA (with an annual benefit cap of $1800), the HRA can only be offered to those enrolled in the medical plan; ERISA, COBRA, HIPAA, etc., will apply. Employers can offer the benefit on a taxable basis entirely outside of the employer’s health plan by setting up a company reimbursement policy.

Last week, President Biden signed an executive order that makes it easier for women to travel across state lines for an abortion. But it’s still a confusing issue. Some states made it a crime to help women terminate pregnancies. Some even allow independent citizens to sue those who aid women in need. It is important to note that ERISA preemption is generally not considered to be a shield against state criminal laws. Some employers rightly fear legal liability.

Understanding state requirements is not always easy. You may need to check with your state laws and insurance commissioners. Here is astate-by-state resourcethat may help. Most importantly, you will want to speak with your lawyer to determine if state laws that potentially impose criminal liability relating to abortion may apply to you. 

Other factors to consider 

Companies that want to entice top-tier candidates must consider the increased importance of healthcare benefits in a job offer. But that’s not the only factor you need to be concerned with, especially if you hire a lot of hourly workers. Many women are already fleeing states where abortion care is banned or at-risk, and as a result, companies have beenstruggling to fill in-person roles. This struggle is likely to increase in states where women—especially low-income women who often fill hourly unskilled roles—are faced with unwanted pregnancies and find themselves unable to work. 

Consider the following:

  • How will your business support a potential baby boom and the related postpartum recovery? Access to new parent counseling/ classes? Access to mental health services? Access to adoption consultation services? Financial planning services?
  • Is your business contributing to childcare? On-site childcare? Dependent care FSAs? Childcare search services?
  • Do you allow flexible schedules? Remote work? Job sharing? 
  • How will all of the above affect the employee’s opportunity for advancement? 

Hiring and Roe vs. Wade

The implications of the reversal of Roe v. Wade for your small business is a lot to think about. While so much of this is still up in the air and subject to change as states have more time to digest, our goal was to provide you with a framework of key points to consider in your own quest to build the business you desire. 

You may be tempted to let the dust settle on this new ruling before making any policy changes in your own human resources departments. But remember that the hiring and worker shortages continue. Looking to hire A Players in a competitive job market? You might want to think through some of these situations from a recruiting perspective. How will you attract and recruit the workforce that will help you accomplish your company goals and mission?

We entrepreneurs are a resilient group and we will navigate these murky waters together. Don’t hesitate to reach out to professionals who can help you!

Angie Noll