How the change in abortion law affects small business accountants

I’ve spent almost four decades dealing with small business owner resistance and noncompliance with employee benefit tax laws. This makes me think that I can predict the outcome of the recent SCOTUS ruling that has divided the nation; at least it’s result within our industry. Looking back in time, we observed the effect of business owners’ rebellion over implementation of ERISA rules in the early 1980s, the many state health care mandates throughout the 1990s, and eventually the revolutionary impact of ACA in 2010. I’ve written, lectured and taught on business owner, CPA, and attorney noncompliance issues that are triggered when personal beliefs overtake the dull role of legal compliance. My documentation of deliberate noncompliance of employee benefit law by CPAs who did not “believe in” ACA was perhaps the most controversial work I ever tackled.

So it seems fairly easy and straightforward to see how the abortion issue will play out for our professional practices:

First, we can be sure that it will be controversial. Even this blog post will draw criticism. There will be increased tensions within accounting firms. Industry associations. Firms that take a ‘middle of the road’ strategy will find it more difficult to remain so. The controversy will outweigh the real tangible issues. We presume that the number of abortions will be the same as before, that most will be accomplished with a prescription medication and that about half will require a consultation with a provider located outside of the woman’s state of residence. The actual total change in expense and time off from work will change, but not dramatically.

Next, realize this will be primarily an employee benefit issue. Some, like me, are heavily involved in small business employee benefits and so our practices will be significantly affected. Others accountants who rarely touch these issues may not need to deal with it. Small business employee benefit plans tend to be slower to change than large firm plans. Market reaction will be segmented, a topic beyond the scope of this blog post. My practice operating as Freedom Benefits has already offered some benefit plan redesigns regarding abortion travel coverage. We have no way to estimate the number of employers who would consider a change, but we can reasonably expect this to be the most often requested benefit plan change for both new and existing clients.

The primary deterrent for the portion of small business employers who want to accommodate abortion care for their employees will be lack of surrounding management infrastructure: weak payroll systems, lacking employee benefits documentation and amateurish HR administration. We hope and expect that an inquiry about abortion care would lead to an all-around improvement in operations efficiency and overall cost savings for the company.

Third, realize that the abortion law reaction will trigger changes to uninsured employee health benefits and employee leave policies. This means that the adaptations are not distant and muted within the pages of an insurance contract, but rather will be front and center, staring in the face of business owners and their employees. Owners will not be able to say that they are simply confirming to evolving law (as with controversial ACA reforms, for example).

Finally, there will eventually be significant deliberate noncompliance with state and federal tax law surrounding this issue. This will not be immediate but rather after state legislators take action to respond to the divided nature of abortion services. Some accountants say that they are apprehensive of this, but I find that most work it out easier than they expected in actual practice. I use marijuana as an example to illustrate the point, Accountants publicly profess their stress over the tax and legal issues in locations where pot is illegal. In that case 100% of the industry is illegal and in violation of criminal, tax and business licensing issues. Yet when a client or associate is actually involved in pot we all seem to work it out. The same will be true with abortion response.

In the end, accountants who can provide confidence, assurance, administrative efficiency through coordinated employee benefits, payroll, and HR systems built on impeccable privacy protection will find an opportunity to shine. The key is to adapt to this evolving need of the workforce smoothly, calmly and seamlessly, providing positive assurance that these employers will rise to meet this one new challenge.