As predicted, the United States Supreme Court issued its final decision in Dobbs v. Jackson Women’s Health Organization overturning the landmark 1973 case Roe v. Wade, which held the U.S. Constitution protected the right of women to terminate a pregnancy prior to the date of viability. The June 24, 2022, Supreme Court decision holds there is no such Constitutional right, and gives the power to regulate the legality of abortions back to the individual states 50 years after Roe. The regulation of abortion at the state level directly impacts the extent to which employers will be able to provide coverage under their health plans, not just for abortion, but for other reproductive health care services.
In anticipation of this decision, many states have acted preemptively to protect the right to terminate pregnancies, but as many as 26 states will now have laws that significantly restrict or ban abortions within their jurisdiction. These laws vary in breadth and scope, from prohibiting physicians from performing abortions, restricting access to abortion medication, attaching civil penalties and criminal liability to those who knowingly or unknowingly aid or abet in the termination of pregnancy, to conferring “personhood” at the time of conception.1
Employers have traditionally relied on the federal laws that govern employer-sponsored health plans, including among others, the Employee Retirement Income Security Act of 1974 (ERISA), to preempt state laws that attempt to regulate employer-sponsored benefit plans. However, employers should not assume that ERISA preemption provides bulletproof protection against all state laws relating to employee benefit plans. There are several important exceptions that can undermine ERISA preemption of state law (including, in this context, state laws regarding abortion and reproductive health). Notably, ERISA does not preempt state insurance laws. Employer plans that provide medical coverage through the purchase of insurance (rather than self-funding employee medical benefits), are subject to applicable state insurance laws and regulations, which are likely to prohibit coverage for abortion care or other health care services state legislatures may view with disfavor.
Another exception to ERISA preemption of state law concerns “generally applicable” criminal laws. There is, however, no clear federal case law that deals with ERISA preemption of state laws that attempt to impose criminal liability with respect to benefits provided under an ERISA health plan (such as criminal statutes that would penalize persons who aid and abet abortions). Additionally, ERISA does not cover (and ERISA preemption is not, therefore, available for) general employment practices and policies that may be impacted by various state abortion laws.
Just as employers are coming to grips after two years of intense regulatory activity related to COVID-19, the Dobbs decision raises the specter of additional and even more complex compliance considerations. Employers will need to evaluate the extent to which state laws restricting abortion may impact their health care plans, privacy practices, leave accommodations, company culture and other employment policies. This will be an extraordinarily difficult task given the number and variety of state laws regulating abortion, open questions concerning the extent to which ERISA preempts such laws, and the intense social and political climate surrounding this issue.
Employers should consult with legal counsel to navigate their federal and state compliance obligations, with the understanding that clear guidance regarding the impact of these laws on employer health plans and employment practices may be years away.