10.1 Introduction
Access to abortion care depends largely on public law, with federal and state governments controlling the legality and regulation of services and providers, and courts articulating individual reproductive rights. Dobbs v. Jackson Women’s Health OrganizationFootnote 1 upended the right to abortion, casting public-law governance of abortion rights into turmoil. This chapter explores one context in which private law plays a limited but remarkable role in access to abortion care: employer-sponsored insurance (ESI). Employers provide health insurance for over half of reproductive-aged Americans, controlling the financial access to abortion care for many. The private laws of insurance regulation grant capacious discretion to employers to offer or not offer abortion coverage, regardless of what public law prohibits or requires.
Employers’ own interests in when and whether their employees reproduce inform how they exercise this discretion granted by private law. As we explain below, by covering abortion employers can avoid some of the much greater health plan and workforce costs of pregnancy and birth. But employers may instead prioritize their own religious objections to abortion and refuse coverage. Either way, the employer acts on its own interest. We turn to concepts of agency to assess what duties employers may owe in their conflicted role. In the regular course of business, employers act as principals and their employees as agents. But as arrangers of health benefits, the roles reverse: Employers act on their employees’ behalf, and so ought to serve their employees’ interests in accessing health care. If guided by agency principles, employers should include coverage for abortion services in their health plans, to the extent the law allows.
If public law continues to erode access to abortion care, ESI creates a space for private law to support access, especially if employers take seriously their responsibilities as health care funders for their employees. That private law grants employers nearly total discretion on abortion coverage, however, illustrates the limitations on private law’s efficacy in this role. And the agency costs involved in employers’ power over employee reproduction ultimately exacerbate existing power differentials and inequities, without assurances that employers will act in their employees’ interests.
10.2 Private Law Grants Employers Discretion over Abortion Benefits
Even in states where abortion remains legal after Dobbs, the cost of the procedure poses a significant obstacle to access. In 2022, around 11 percent of Americans lacked cash, savings, credit card balances, or other finances to pay a US$400 bill.Footnote 2 The average price for abortion services surpasses this at US$500–US$2,000,Footnote 3 and after Dobbs, travel time required for abortion care has quadrupled,Footnote 4 adding expenses for travel, lodging, and lost wages to the cost of the procedure.
Few can afford these costs without insurance.
Health insurance coverage practically determines people’s access to abortion care, like other health care services.Footnote 5 For the majority of Americans who have commercial insurance, a dense mix of state insurance law, the Affordable Care Act (ACA), and antidiscrimination laws guide the coverage decisions and administration of their plans.Footnote 6 Most reproductive-age Americans rely on ESI for coverage.Footnote 7 This effectively gives employers a gatekeeping role in determining what health care services will receive funding.Footnote 8
ESIs are regulated primarily by the ACA and the Employee Retirement Income Security Act of 1974 (ERISA). But ERISA more de-regulates, through sweeping preemption of state law, and comparatively sparse federal requirements for what ESI must cover.Footnote 9 Similarly, the ACA incentivizes large employers to offer health benefits by taxing their choice not to and imposes comparatively lighter coverage requirements for ESI plans than on individual insurance.Footnote 10
Employers have designed plans that exclude certain services from coverage to save money. State (and occasionally federal) legislators have enacted piecemeal mandates for insurance coverage of certain services. Insurance companies must comply with state mandates, but ERISA preemption exempts employers who structure their health plans as “self-funded” plans from compliance.Footnote 11 ERISA itself imposes few coverage requirements. ERISA does not require employers to cover maternity or hospitalization; it merely requires that if an employer plan chooses to cover those two services, then it must cover hospitalization for up to forty-eight hours after vaginal delivery.Footnote 12
ERISA does not require that employer plans cover maternity care at all. That requirement comes from the Pregnancy Discrimination Act (PDA) of 1978, which applies only to employers with fifteen or more employees,Footnote 13 while also allowing employers with fifty or more employees to exclude labor and delivery coverage for employees’ dependents.Footnote 14
Even as the ACA, ERISA, and other laws add bits and pieces to employer plan requirements, the forces of abortion exceptionalism leave employers with nearly unfettered discretion on whether to include abortion in the coverage of their employee benefit plans.Footnote 15 ERISA and the ACA expressly preserve employer plans’ discretion to exclude abortion from coverage.Footnote 16 The PDA explicitly states that employers are not required to offer coverage for abortions.Footnote 17
State laws vary, with some requiring that health insurance cover abortion, and others prohibiting it.Footnote 18 ERISA’s preemption loophole for self-funded plans, however, preserves employers’ discretion to cover or refuse to cover abortion despite state law.Footnote 19 In states with abortion insurance mandates or prohibitions, employers may purchase policies from insurers who must comply with these rules, or employers may choose to self-fund their plans and avoid these rules. Thus, ERISA preempts states from enforcing antiabortion laws against those self-funded plans that cover abortion and related travel expenses in the wake of Dobbs.Footnote 20
The private law of abortion coverage is more flexible than its public law counterparts, and somewhat less exceptionalized. Public insurance programs have long operated under the Hyde Amendment’s prohibition on the use of federal funds to cover abortion services except when necessary to save the pregnant person’s life,Footnote 21 restricting coverage options in Medicare and Title X. State Medicaid programs may choose to cover abortion in more circumstances but must do so solely with state funds.Footnote 22 Similarly, the federal government as an employer is subject to the Hyde Amendment restrictions in its employee benefit plans.Footnote 23 State governments as employers have the option of covering abortion, or not.
The ACA, PDA, and ERISA operate to give employers ultimate flexibility in deciding whether to cover abortion.
10.3 Private Law’s Effects on Access to Abortion
Abortion rights are largely viewed through the lens of public law, specifically the extent to which the Constitution permits government intrusion into individual reproductive choices. Yet finance – a critical facet of access to abortion, and most other health care – falls largely to employers and the promises they make to their employees, guided by private law.Footnote 24
The reliance on private law to govern the major source of funding for abortion has some advantages to leverage and pitfalls to avoid if the goal is to secure safe and affordable abortions for those who most need it in an era of eroding constitutional rights to abortion.
10.3.1 Benefits and Limitations of Relying on Private Law
After Dobbs, many states limited, banned, or criminalized abortions.Footnote 25 Other states passed laws expanding protections for abortion access. In the chaos that Dobbs engendered, the reactions of employers through their employee health plans illustrate the main benefits and limitations of private law as bulwark against the erosion of reproductive rights.
Employers who covered abortion services were forced to examine impacts of Dobbs and state legislation on the benefits offered for their current plan year. In states that outlawed or further curtailed abortion after Dobbs, some employers who fund abortions may have been tempted to shift course. Private law offers temporary protections here in the form of the contractual commitments employers make to their employees for the given benefit year.
Employers who already elected to cover some form of abortion for employees searched for ways to reconcile these benefit promises with the post-Dobbs waves of restrictive state legislation.Footnote 26 Many employers found providers out-of-state willing to perform services for their employees for no additional cost-sharing.
Many employers, especially large private sector ones, included provisions for travel coverage and other expenses to offset additional costs patients face to access abortions.Footnote 27 Some government employers followed suit.Footnote 28 Most companies are reimbursing travel under their employer health plans, much as they reimburse travel for specialty health services like cancer treatments that are only available from some specialty sites.Footnote 29 After international law firm Sidley Austin promised reimbursement for out-of-state abortion travel costs to employees of its Dallas and Houston offices, Texas legislators accused the firm of violating state laws prohibiting the “aiding and abetting” of abortions.Footnote 30
Private law also protects employers who wish to cover abortion care going forward.
ERISA enables self-funded employer benefit plans to help people access abortion, even across state lines.Footnote 31 Employers with the will can design their plans to cover abortion services received out-of-state, and to safeguard employee information from states where the act of receiving abortion care in or beyond the state border is illegal. Given the national reach of many large employers, and the number of people they cover through health plans, employers have a powerful tool to secure access to abortion for large numbers of people.
For lawmakers who wish to limit access to abortion, the private law of ESI requires them to do battle on an entirely different legal terrain, with powerful corporations and the entrenched decades-old behemoth that is ERISA. Many public laws treat abortion exceptionally, but ERISA is abortion-blind. Its safeguards apply equally to employers funding abortions as any other employer health benefit, forcing legislatures to attack a law with broad general applicability. In an era of eroding abortion rights, the private law supporting employer benefits has become an unanticipated safe haven.
Still, there are significant limits to this privatized model of coverage, from the perspective of advancing reproductive rights, access, and justice. The private funding model of ESI does not construct a durable or widespread protection for abortion funding, and it excludes many of the people most in need of financial assistance.
The very same forces of private law that can protect abortion benefits so too can be used to undermine and evade state laws that protect abortion access and mandate coverage. For self-funded plans, ERISA preempts the enforcement of a state mandate for abortion coverage in the same way that it preempts the enforcement of a prohibition for such coverage. Ten percent of employees work for employers whose plans expressly exclude abortion coverage in some (6 percent) or all (4 percent) circumstances.Footnote 32 Large companies, and self-funded plans and private nonprofits (often religiously affiliated organizations) are all more likely to exclude or limit abortions.Footnote 33 Even for workers with plans that do not expressly exclude abortions, many face limits on access with respect to gestational age, method, and caps on covered services per employee.Footnote 34
Similarly, private law does nothing for the 20 million federal workers, veterans, and active-duty military and their dependents who do not receive abortion coverage under their employer plans owing to the Hyde Amendment.Footnote 35
Private law also does little for low-income women and women of color who are most likely to seek abortions,Footnote 36 more likely to be on Medicaid, and less likely to receive insurance through their work.Footnote 37 Medicaid is a workhorse for funding reproductive care generally in this country, paying for more than four in ten births nationwide and a majority of all births in some states.Footnote 38 Yet thirty-three states have enacted their own Hyde-style amendments barring Medicaid coverage for abortions.Footnote 39 Many of those states have higher than average maternal morbidity and mortality rates, with Black women bearing the greatest burden.Footnote 40 Those most in need of help accessing abortion care are left to the public funding programs that most frequently refuse to cover abortion.Footnote 41
The abortion-access gains via ESI thus are not equitably distributed. Nor are they durable. Employers decide on their plans annually and can change any aspect from year to year. A firm that considers abortion coverage to be in its political and/or financial self-interest one year may act differently the next.
10.3.2 Employers as Agents for Reproductive Choice
As the dust settles on Dobbs, employers will face external pressures from various groups to fund or not to fund abortions. How should employers weigh these many competing interests as they craft benefit plans and abortion coverage going forward?
Health law and policy scholars have proposed the principal–agent relationship as a theoretical framework to explore the inherent obligations and conflicts within the employer–employee relationship and the acquisition of health benefits and, moreover, when these relationships demand that public law step in.Footnote 42 In employment law, the principal–agency relationship views employees as agents of the principal employer, serving the employer’s best interests. In health benefits, this is reversed. The employee engages her employer “to perform the service of purchasing and administering a health insurance plan on [her] behalf.”28
The principal–agent concept holds as a broad construct, though the employee benefits relationship does not capture all elements of traditional agency law.Footnote 43 Employees do not necessarily have control over their employer-agent in the health benefits scenario, as employers have already negotiated and secured their benefit plans before they hire new employees.Footnote 44 Most privately employed people likewise have little say in or even knowledge of their employers’ benefit plan negotiations until after the plans are set. Dobbs’ massive disruption may sharpen individuals’ awareness of the degree to which their current plans cover reproductive services, including abortion.
The principal–agent concept applied to employer health benefits reveals many agency costs, or times when the agent employer’s interests conflict with the principal employees. Most obviously, employers are financially incentivized to offer the least generous health benefits possible to their employees.Footnote 45 These agency costs have been used to explain the shortcomings of the ESI model from health policy perspectives.Footnote 46 Agency costs sometimes make employer benefits models unworkable, demanding public law stand in for the failures of private law.Footnote 47 ERISA, the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Americans with Disabilities Act, and finally the ACA all can be understood as times where public law was deployed to patch failings of private law. This piecemeal patching faces an uphill battle correcting the fundamental design flaw that social policy relies on employers to secure access to care for working Americans and their dependents, but employers primarily serve their own business interests.Footnote 48
What does the principal–agent concept instruct for employers as keepers of abortion benefits in an increasingly fraught era of reproductive justice? Counter-intuitively, private law may impose a higher duty on employers than the government imposes on state actors when it comes to rights to abortion. Governmental actors who forbid or require abortion coverage through public law owe no formal duties to the constituents impacted by their decisions, apart from democratic accountability. Roe’s framework recognized a “compelling governmental interest” in fetal protection, even when in tension with protecting the pregnant person,Footnote 49 and Dobbs only minimized the level of scrutiny applied to government restrictions on abortion.
But private employers’ negotiation of health care benefits implicates duties owed directly to the beneficiaries, including persons who are or may become pregnant. If employers are to act as agents in the best interests of their principal employees in designing their health plans, they ought to cover abortion fully and to the greatest extent permitted by law, including offering abortion benefits out-of-state and with travel support where needed. Reproductive justice demands that principals (employees and other plan beneficiaries) have control over their reproductive potential, including the right not to have a child,Footnote 50 and concepts of bodily autonomy and informed consent further underscore this interest.Footnote 51 Full access to abortion coverage furthers the individual’s health interests, as well as the social, personal, and economic consequences that flow from pregnancy, birth, and child-rearing.
The principal–agent concept also reminds employers that their fiduciary obligations flow to employees and dependents when it comes to health benefits. In this role, employers’ duties are not to the public, state or federal lawmakers, their customers, or their shareholders. Nor are they duties owed to fetuses as potential future plan beneficiaries, distinguishing employers’ role from state actors regulating abortion. Courts since Roe have recognized a compelling governmental interest in protecting potential life if the government chooses to deploy public law for this purpose. But the private principal–agent relationship is a fiduciary one, whose formation typically assumes some amount of agreement and commitment between already-existing parties.Footnote 52 Stretching the concept of principal–agent in health benefits to encompass the hypothetical future unborn would have implications for abortion, as well as infertility care and fetal therapies, and would likely strain the doctrine in ways that are beyond the scope of this chapter.
Employers do need to serve all their employees in their benefits design, as well as nonemployee beneficiaries. This has been a central challenge for employers in navigating this agency relationship in the past, as employees may each be owed a fiduciary duty but may want very different things from their health benefits.Footnote 53 While some may argue that abortion coverage would serve some employees but not others, this neglects to consider fully the importance of reproductive freedom as an individual right to decide for oneself. With that in mind, no single employee or employee interest group ought to be able to block access to this care simply because it is not in their own interests. The fiduciary interest is owed to all beneficiaries. This necessitates that beneficiaries individually have the right to choose for themselves, and so the benefit of abortion must be available to all, even if some do not want it or do not want it covered for others.
While the many regulatory laws governing employer benefit plans suggest broad discretion of employers with respect to abortion, the principal–agent framework directs employers to do what is in the interests of their employees. The concept of employer as agent of its employees suggests a potential limitation on employers’ discretion to exclude abortion coverage and perhaps even a duty to include abortion coverage.
10.4 Employer Benefits and Reproductive Autonomy: An Uncomfortable Marriage
Private law enables employers to fund abortions and arguably imposes duties to do so, even in states where that decision will be met with increasing hostility. Yet, there are reasons to temper the enthusiasm for private law in this role. Employer control over reproduction is historically and existentially fraughtFootnote 54 and does not square with a larger aim of reproductive autonomy. While the principal–agent framework directs employers to act in their employees’ interests, in reality the ESI model places decisions about access to reproductive care in the hands of employers, privileging their interests over employees’, fundamentally undermining the concept of reproductive autonomy.
“[A]t their core, reproductive rights cases are just as much about what is being safeguarded and why, as who the rights are being safeguarded from. They consistently describe, up until Dobbs, a universe in which private and intimate decisions around reproduction are left to the individual alone, in counsel with health care professionals.”Footnote 55 In Roe v. Wade, for instance, the right to abortion was safeguarded in part because of pregnancy’s potentially harmful effects on physical and mental health, financial well-being, and the experience of stigma against unwed mothers.Footnote 56 Planned Parenthood v. Casey characterized reproduction as a defining life choice “central to personal dignity and autonomy.”Footnote 57 Contraception cases have emphasized the repulsive nature of intrusion into the sensitive and personal decisions about reproduction.Footnote 58 Even Dobbs, while overturning the federal constitutional right, does not challenge the idea that abortion care is deeply personal.
Employers do not exert control over abortion access to the level that state bans and criminalization do. Indeed, employers are statutorily prohibited from discriminating against employees who seek, obtain, or forego abortions.Footnote 59 But if reproductive autonomy demands the choice reside with individuals, then ESI and its level of employer control over abortion care represent a practical and existential challenge to the fulfillment of many Americans’ reproductive autonomy.
Employers have their own economic, actuarial, moral, and other interests that may conflict with employees’ interests, compromising employers’ ability to be trusted fiduciaries of rights as important as reproduction.Footnote 60
Employers may act on economic concerns, sometimes viewing pregnant workers as “economic liabilities.”Footnote 61 Employers may discourage pregnancy because of the costs of accommodating parental leave and job modifications,Footnote 62 concerns about organizational fairness to other employees who must pick up extra work,Footnote 63 and desire to meet the sensibilities and preferences of customers.Footnote 64 These interests largely instruct that employers should fully fund abortion and contraceptive services, as a way to avoid some of these more onerous expenses.
Employees also sit as actuaries because they at least partially fund their employee health plan. Employers who self-insure see the direct cost of employee health consumption, while employers who pay insurers see consumption indirectly in the cost of employer contribution to the premiums. Pregnancy is costly to health plans. Labor and delivery costs can exceed US$20,000Footnote 65 and constitute one of the most frequent causes of hospitalization of the non-elderly. Abortions are a cost-saving mechanism for a health plan, with one study reporting that unintended pregnancies account for a full 1 percent of the employer’s health benefits spending per year.Footnote 66
But not all employer incentives flow from economic self-interest or point toward abortion coverage. Employers’ moral or religious beliefs may influence their funding of reproductive services. Hobby Lobby, the nationwide craft chain, famously challenged the contraception mandate of the ACA, winning the right of some nonreligious entities to refuse to cover certain health services in employer plans on the basis of their religious objection.Footnote 67 Employers also court public opinion, which may direct them in favor of covering abortion services or against it at any moment or location. For example, in the aftermath of Dobbs, companies driven by socially conscious branding may capitalize on popular opinion, given that a majority of Americans oppose Dobbs and believe abortion should be legal in all or many circumstances.Footnote 68
Employers thus have varied self-interests implicated in their decision whether to offer their employees coverage for abortion. Some interests argue for coverage; some argue against. This is not truly the point. Fundamentally, the very idea of a fiduciary of reproductive care funding is troubling to the goals of reproductive justice, which demand that individuals be supported in decisions to reproduce or not, as well as in safely raising their children.Footnote 69 A fiduciary inserts third-party control over the individual, whereas reproductive freedom demands the individual have control over their own reproductive future without interference from others (barring limited interests of the state). Employers’ own economic interests might drive them to cover abortion care to avoid the costs of employees’ reproduction, in convergence with one dimension of reproductive justice. Relying on this interest convergence, however, can thwart the other dimensions of reproductive justice. Consider that the same combination of economic interest and coverage discretion drives most employers to refuse coverage of assisted reproduction services unless mandated, as Myrisha Lewis illuminates in her chapter.Footnote 70
When employers’ interests conflict too powerfully with the interests of their employees, it imposes agency cost: “the cost arising from a system that gives an agent the incentive to act contrary to the interests of its principal” specifically “by providing inadequate health care to their employees” for the firms’ financial gain.Footnote 71
When agency cost is too great, this justifies the need for public governance. Consider the case of abortion benefits after Dobbs. In states that criminalized or banned abortion, employers will face enormous political pressures to discontinue abortion benefits. They will also face rising financial and other burdens in meaningfully supporting access to abortion, if it means networking to include out-of-state providers, and then covering the costs of out-of-state procedures and travel expenses.
This may be a time where agency cost is too great, and outside regulation of the employer–employee benefit regime is needed to ensure employers act in their employees’ best interests. Yet, employers are only involved in paying for abortions because federal and state governments have refused public funding through the Hyde Amendment. No governmental help is likely coming to secure the abortion-access interests of employees, especially not in the states where the greatest pressures to defund abortion will be. Any efforts by the government to expand health benefits and to align employer interests with increased health coverage will very likely continue to make abortion the exception, as has been the case in prior decades of health reform and regulation.Footnote 72
10.5 Conclusion
Dobbs fully empowered public law to deny access to abortion. To the extent that ESI beats back against the tide of abortion bans that Dobbs enabled, advocates for reproductive autonomy have reasons to be thankful that private law plays this role. Despite their limited reach, these private law ramparts for ESI coverage present opportunities to expand abortion access in a new era of extreme restriction. Yet, theoretical examination of the employer-sponsored benefit model instructs caution. Employers have long privileged their own economic interests over the health needs of their employees. Employers may face external pressures to discontinue abortion coverage, absent legal requirements to do so. And, ultimately, employer control over abortion benefits, even if it sometimes means access, can be undermining to the very notions of reproductive autonomy. Ultimately, public and private law both prop up a system of employer choice, rather than individual autonomy.
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