HR-1208-119
Referred to the House Committee on Ways and Means.
Sponsored by Brian Mast (R-FL)
What it does
This bill would amend Section 162 of the Internal Revenue Code to deny employers the standard business expense deduction for two categories of employee benefits: (1) reimbursements or payments for employee travel to obtain an abortion, and (2) reimbursements or payments for gender transition procedures — including surgery, puberty-blocking drugs, and cross-sex hormones — for an employee's minor child (under age 18). The bill would not affect employer deductions for other medical benefits, and it would not prohibit employers from offering these benefits — it would only remove the tax deduction for doing so. It would apply to taxable years beginning after enactment.
Who benefits
Taxpayers who oppose public subsidization of abortion travel or youth gender transition care through the tax code would see their policy preference reflected in federal law. States that have restricted abortion or youth gender transition procedures may see reduced financial incentive for employers to help employees circumvent those restrictions. Small businesses that do not currently offer these benefits would face no change and no competitive disadvantage relative to larger employers who do.
Who is hurt
Employers — particularly large corporations — that currently offer abortion travel reimbursement or gender transition benefits for employees' minor children would face a higher after-tax cost for those benefits, as they could no longer deduct those expenses. Employees at such companies who rely on these benefits could see them reduced or eliminated if employers respond to the increased cost by cutting them. Transgender minors and their families who depend on employer-sponsored coverage for gender-related care could be indirectly affected. Workers at companies that drop these benefits due to cost would lose access to them.
Supporters argue
Supporters argue that the federal tax deduction for business expenses effectively subsidizes any benefit an employer chooses to offer, meaning all taxpayers indirectly fund abortion travel and youth gender transition procedures through foregone revenue. They contend that Congress has broad authority under the Taxing and Spending Clause to define which business expenses merit a deduction, and that removing a deduction is not a prohibition — employers remain free to offer these benefits at their own full cost. They further argue that allowing deductions for procedures that many states have restricted or banned creates a federal incentive that undermines state-level policy choices.
Opponents argue
Opponents argue that Section 162 has long allowed deductions for ordinary and necessary business expenses, including employee benefits, and that selectively disallowing deductions based on the medical content of a benefit sets a precedent for using the tax code to penalize disfavored healthcare decisions. They contend that in practice, removing the deduction functions as a financial penalty that would pressure employers to drop these benefits, disproportionately affecting lower-income workers who cannot self-fund abortion travel or pediatric gender care. They further argue that the bill's definitions — particularly of "gender transition procedure" — embed contested medical and legal characterizations into the tax code in ways that may conflict with established medical standards.
Constitutional context
Congress has broad authority under the Taxing and Spending Clause (Art. I, §8, cl. 1) to define the scope of tax deductions, including which business expenses qualify under Section 162. The bill does not impose a new tax but rather removes an existing deduction, which is generally within congressional discretion. The abortion travel provision intersects with the post-Dobbs landscape, where reproductive rights questions have been returned to legislatures, though this bill operates through the tax code rather than a direct prohibition.
Checks and balances
Congress gains authority to shape employer benefit offerings indirectly through the tax code; the IRS would implement and enforce the new deduction disallowance, and affected employers or employees could challenge specific applications in federal tax court.
Historical precedent
Congress has previously used deduction disallowance to discourage specific business conduct — for example, denying deductions for fines, penalties, and lobbying expenses — but no directly analogous precedent exists for disallowing deductions based on the medical content of employee health benefits.