Could Texas’ new heartbeat law lead to lawsuits against companies providing abortion insurance?


For companies offering abortion coverage as part of their employee health benefits, Texas’ restrictive new abortion law raises a chilling question: could they, too, be held legally liable if their employees get an abortion?

The so-called Heartbeat Act that outlaws the procedure at six weeks creates a new reality for Texans as they decipher what aiding and abetting means under the new law. Employers could be at risk of expensive lawsuits and media coverage attaching them to one of the most controversial and highly politicized health care procedures in modern history.

“It makes me concerned that an employer, if they were self-funding or partially funding an insurance policy that did allow for abortion coverage, and then a woman covered by that policy did get an abortion, whether they knew or not, they could potentially be liable,” said Mary Goodrich Nix, a partner at the Lynn Pinker Hurst & Schwegmann law firm in Dallas.

Abortion coverage through health insurance is rare, especially in Texas. Under state law, those who want it have to pay a premium to add abortion care to their private insurance policies. It’s illegal in the U.S. under the Hyde Amendment to receive abortion coverage through public health insurance.

There are fewer restrictions for companies with self-funded insurance plans, meaning the employer takes on most or all of the cost of benefit claims and all of the risks associated with funding health care coverage.

Between 70% and 80% of employer-based health care plans in North Texas fall in the self-funded category, said Britt Berrett, director of the Center for Healthcare Leadership and Management at the University of Texas at Dallas.

“We have a huge risk on our hands because a majority of health care plans only use insurance companies as administrators,” Berrett said.

Because of this setup, it’s individual businesses that are liable for abortion coverage.

These companies join a growing list of people and entities that could potentially be sued under the law. Doctors, clergy members and even ride-share drivers who take people to abortion clinics could be exposed to lawsuits.

The law’s enactment comes just as businesses begin yearly conversations with insurance companies about what changes to include in their company health care plans. Now, with employers being potentially liable to abortion-related lawsuits, companies have to reconsider the options they offer their workers.

“We are currently assessing the new law to determine the most appropriate guidance for our customers and members,” said a statement from Richardson-based Blue Cross Blue Shield of Texas, the state’s largest insurer.

For large companies, lawsuit payouts and legal fees may not be a big enough deal to stop providing abortion coverage. The payout for such a lawsuit is $10,000, not including attorney fees.

But smaller businesses might not be able to bear that cost — or the spotlight of potential media coverage that comes with being named in a lawsuit.

“I don’t want to be the CEO of a cupcake company that has to be on the front page,” Berrett said.

It’s unclear whether businesses could be held liable if employees travel out of state for an abortion using company health care policies. It’s also unclear whether businesses that don’t offer abortion coverage could be liable if an employee uses insurance coverage for part of an abortion visit.

“Texas prohibits most private insurance plans from covering abortion. But if you have an insurance plan, part of your visit might still be covered,” according to the Austin Women’s Health Center website.

The answers to the questions created by the broad abortion law likely won’t be answered until litigation begins. The Biden Administration sued Texas Thursday in an attempt to stop the law, calling it “unconstitutional.”

Major employers have been largely silent about the abortion law. In Dallas-Fort Worth, leading companies such as Toyota, American Airlines, Southwest Airlines, McKesson Corp., AT&T and Texas Instruments either declined or did not respond to requests for comment.

“Employers are going to have to ask themselves, ‘are we going to run legal liability for these constraints?’” Berrett said.

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