16. PEACE, JUSTICE AND STRONG INSTITUTIONS

Roe Abortion Rights Repeal Will Test Companies’ Equal Treatment Commitments – Barron’s

Written by Amanda
Illustration by Tiffany Pai

About the author: Laurie Hays is the founder of Laurie Hays & Associates, a communications advisory firm.

In striking down Roe v. Wade today, the Supreme Court held that “the authority to regulate abortion is returned to the people and their elected representatives.” Companies will have a say, too. 

In the run-up to the ruling, scores of companies committed to covering expenses for women employees’ travel out of state to receive abortions.

Even though the court ruling now allows states to set their own abortion laws, companies that operate in multiple states have decided their health plans won’t treat their employees differently depending on where they live. So, they will maintain equal coverage to all their employees, no matter what state they live in—as they do for other medical procedures. 

Roe provided for equality of access to abortion across the country. Companies are now stepping in to fill the government void the court has created. Making it a matter of employee healthcare policy is good cover to avoid taking a moral stand on abortion itself and may work for a while. 

Citigroup CEO Jane Fraser for one said the bank’s decision to pay for abortion procedures out of state wasn’t political. Instead, it follows a 20-year practice of covering reproductive health-care benefits and “making sure our employees have the same health coverage no matter where in the U.S. they live,” she said.

Tesla put the clause in its impact report. It offers “an expanded safety net program and health insurance offering that includes travel and lodging support for those who may need to seek healthcare services that are unavailable in their home state.” 

Twenty-six American states are poised to ban or severely restrict abortion with Roe overturned. There are about 33 million women of child-bearing age who could face logistical nightmares and increased health risks as well as expenses if they have to go out of state for abortions.

To be sure, a lot of time and money will now be spent arguing about the legal grounds protecting companies’ decisions to cover the cost to travel out of states that forbid abortions. Travel benefits “raise complex legal issues applicable to employers’ group health plans and fringe benefit plans,” the National Law Review notes.

Federal regulations don’t compel companies to offer identical healthcare benefits to employees who live in different states, said Phyllis Borzi, a former official at the U.S. Department of Labor. There are some restrictions on the treatment of retirement plans. “But there are no similar rules covering health plans,” Borzi said. Companies could test out a new body of law, if they have the stomach for it. 

State legislators are likely to retaliate. Briscoe Cain, a Republican Texas state legislator warned Citigroup in March that he would introduce a bill to prevent the bank from underwriting municipal bonds in the state unless it rescinded its abortion travel policy. 

Companies wanting to pay for travel will have to decide how far they’re willing to go to support their employees. Some states including Texas and Missouri are threatening criminal penalties for aiding and abetting women who go out of state for abortions and prosecuting them when they return. 

Public companies since the murder of George Floyd and before that the rise of #MeToo have done a lot of work to put their cultures in order. The underlying mandate employees and stakeholders have put forward includes diversity, equal treatment and pay regardless of gender and race, respect, transparency and accountability. Equal access to abortions fits squarely into this category.

But abortion is only one of many conflicts companies now face as they defend the new employee handbook from conservative accusations they’ve gone “woke.”

Texas and Florida have lured significant numbers of companies to relocate with attractive tax rates. They’re also trying to destabilize the social-purpose commitments companies have spent years trying to live up to. Last week, the Texas GOP, which controls both houses, adopted a platform that rejects the 2020 election results, calls to repeal that 1965 Voting Rights Act passed to end racial discrimination at the polls, and describes homosexuality as an abnormal lifestyle choice.

Texas has successfully attracted 53 of the Fortune 500 to headquarter in the state by offering lower taxes than California and cheaper living for employees. Austin during the pandemic welcomed more Bay area residents than any other region outside of Texas during the pandemic, earning it the nickname Silicon Valley 2.0. 

“For a public company with a fiduciary responsibility to shareholders, the allure is substantial,” Texas economist Ray Perryman told the Dallas Morning News last year, after the state passed a restrictive new abortion law. Companies that have been arguing their responsibilities go beyond just shareholders will have to decide whether they want to put their money where their mouth is—or at least where their tax base is.

Companies that stay and stand their ground will help at least some women in Texas. But not all.

Guest commentaries like this one are written by authors outside the Barron’s and MarketWatch newsroom. They reflect the perspective and opinions of the authors. Submit commentary proposals and other feedback to ideas@barrons.com.

Source: barrons.com

About the author

Amanda

Hi there, I am Amanda and I work as an editor at impactinvesting.ai;  if you are interested in my services, please reach me at amanda.impactinvesting.ai