Post-Roe World Could Create Talent Losses
Author: Natasha K.A. Wiebusch
September 8, 2022
Key Takeaways
- Without intervention, talent pools for employers in states with abortion bans could shrink by 32%.
- 64% of employers will limit travel benefits to IRS tax-free amounts, indicating that offering travel benefits as a health care benefit has become the favored approach.
- Travel benefits are becoming increasingly popular, but long travel distances will diminish their effectiveness. Employers should consider how far their employees must travel when structuring a travel benefit.
- Higher pay is more likely to convince job-seekers to move to a state with an abortion ban than better benefits, but inflation is reducing real increases in earnings.
- Employers should consider increasing remote work and office transfers to compete for the job-seekers who stated that not even the ideal job offer would convince them to accept a job in a state with an abortion ban.
On August 5, 2022, Indiana passed the first abortion ban in the post-Roe era. The law prohibits abortion at fertilization with narrow exceptions.
Eli Lilly, a notable employer that calls Indiana home, responded to the law by expanding its employee health plan coverage to include travel benefits for reproductive services. The problem, according to Eli Lilly, is that this effort might not be enough to prevent talent loss.
Other organizations have similar concerns. In 2021, 80 companies - including Netflix and Lyft - signed a statement denouncing Texas's heartbeat abortion ban. The statement warned that the law was bad for business, threatened gender equality, and put "families, communities, businesses and the economy at risk."
Clearly, employers have reason to worry that abortion bans will harm talent pools in states where abortion is banned. The question is, how can they prepare?
The Impact of Abortion Bans
Recent data shows that abortion bans are already impacting talent pools. According to a survey by Resume Builder, 32% of job-seekers will not even consider a job in a state with an abortion ban.
The survey also found that 27% of job-seekers residing in states that have abortion bans will only apply for jobs in states where abortion is currently legal and will likely remain legal.
How many states have abortion bans?
A slight majority of states have abortion bans or severe restrictions on the books. Although courts have temporarily blocked some of these laws, legislatures in those states are gearing up to pass new bans in upcoming legislative sessions.
Employers in states with bans and restrictions must consider their options to minimize talent losses both now and in the future.
Travel Benefits for Abortion Care
In these first months of the post-Roe era, the most popular strategy used by employers to support employees is to provide a travel benefit. Travel benefits can help reduce talent losses by providing employees access to abortion care when it is not available locally.
Since June 2022, in addition to incorporating a travel benefit to their existing health plan, employers have become acquainted with an alphabet soup of travel benefit vehicles, including:
- Health Reimbursement Accounts;
- Health Savings Accounts;
- Flexible Spending Accounts; and
- A post-tax general travel benefit.
Although approaches vary, travel benefits have continued to increase among employers:
| Date Collected | Data Source | Number of Employers Surveyed | Percent of Employers Offering Abortion Travel Benefits | Percent of Employers Who Plan to Add Abortion Travel Benefits |
|---|---|---|---|---|
| June 30, 2022 | Mercer | 1203 | 5% | 23% |
| July 14, 2022 | Integrated Benefits Institute | 207 | 36.7% | N/A |
| July 28, 2022 | Mercer | 298 | 11% | 21% |
| August 1, 2022 | Willis Towers Watson | 305 | 35% | 16% |
According to Willis Towers Watson's survey, the majority (64%) of employers offering travel benefits will limit benefits to IRS tax-free amounts, indicating that most employers will offer travel benefits as a health care benefit as opposed to a general post-tax travel benefit.
Each option has its advantages and disadvantages. Before choosing how to offer a travel benefit, employers should consult with legal counsel and consider key compliance issues, such as ERISA compliance, HIPAA, and aiding and abetting laws, which prohibit aiding someone in obtaining an abortion.
Questions to Consider Before Choosing a Travel Benefit
- Is the company's group plan self-insured and therefore covered by ERISA?
- Does an "aiding and abetting" law apply to my organization?
- What would the company's HIPAA responsibilities be?
- Will the benefit comply with mental health parity requirements?
Travel Benefits May Not Be Enough
Despite their increasing popularity, travel benefits may not be enough. According to the Resume Builder survey, 49% of job-seekers looking only in states without abortion bans stated that the ideal job offer would not change their mind.
Also, among the reasons why job-seekers were avoiding states with bans, 57% said they wanted to ensure abortion access. Unfortunately, while helpful, travel benefits may not actually ensure access for employees who have to travel a long distance to access care.
A recent Bloomberg study found that on average, employees would have to travel 276 miles each way, about four hours without traffic at highway speeds, to obtain abortion care. Many employees would have to travel much further. Employees living in Austin, Texas, for example, would have to travel eight hours by car each way to obtain an abortion in either of the two nearest clinics (Wichita, Kansas or Santa Teresa, New Mexico).
Long-distance travel for abortion presents questions of affordability, time and safety. Employees will have to weigh the risk of being far from states with legal abortion while living in a state, like Texas, where access to emergency abortion care is also in question.
Certainly, travel benefits will help reduce talent losses, but the data shows that it will not prevent it completely. Employers must consider other options.
Other Options for Employers
Higher Pay
Higher pay is more likely to convince job-seekers to move to a state with an abortion ban than better benefits, according to Resume Builder's survey. That is, 50% of pro-choice job-seekers said they would move to a state with an abortion ban for higher pay. Only 15% said better benefits would convince them.
However, increasing pay may be easier said than done. Employers looking to attract or retain employees in states with abortion bans through pay increases will be forced to consider the uncertainties of inflation and a possible recession.
Remote Work and Office Transfers
Allowing employees to work from anywhere removes the need for travel benefits. Since the onset of the COVID-19 Pandemic, remote work has rapidly increased in popularity, making it a viable talent acquisition and retention strategy for organizations that can support a remote workforce. Notably, PwC's survey found that 70% of employers have expanded remote work or have a plan in place to do so as one of their talent acquisition strategies.
To attract and retain those employees who stated they would not move even for the ideal job offer, remote work is a strong alternative.
Employers that cannot support a remote workforce may also consider allowing employees to transfer offices. One large employer, Google, has already informed employees of this option.
The Bottom Line
Recent data shows that the post-Roe world has serious implications for companies, including talent losses. To prepare, employers located in states where abortion is banned or restricted must think strategically about:
- Whether and how to provide a travel benefit to employees and how to supplement those benefits with other incentives,
- How to structure salaries and raises competitively while considering the uncertainties of inflation and recession, and
- The extent to which they can support a remote workforce and/or accommodate office transfers.