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

For companies that offer abortion insurance as part of their employee health care benefits, Texas’s restrictive new abortion law raises a terrifying question: Could they, too, be held legally liable if their employees have an abortion performed?

The so-called Heartbeat Act, which bans the procedure after six weeks, creates a new reality for Texans as they decipher what aid means under the new law. Employers could face costly legal proceedings and media coverage linking them to one of the most controversial and politicized health cases in modern history.

“It worries me that if an employer is financing or partially financing insurance, he will allow abortion coverage and then let a woman covered by that policy have an abortion, whether she knew it or not, she might could stick, ”said Mary Goodrich Nix, partner at the law firm Lynn Pinker Hurst & Schwegmann in Dallas.

Health insurance abortion is rare, especially in Texas. Under state law, those who wish must pay a premium to include abortion treatment in their private insurance. In the United States, the Hyde Amendment makes it illegal to get abortion insurance through public health insurance.

For companies with self-financed insurance plans, there are fewer restrictions, which means that the employer pays most or all of the cost of benefit claims and all of the risks associated with financing health insurance.

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

“We have a huge risk on our hands because most health insurers only use insurance companies as administrators,” said Berrett.

Because of this setup, it is individual companies that are liable for abortion coverage.

These companies join a growing list of people and organizations who could potentially be sued under the law. Doctors, clergymen, and even passengers taking people to abortion clinics could face lawsuits.

The law is passed when companies start annual discussions with insurance companies about changes to their company health plans. Now that employers may be responsible for abortion lawsuits, companies need to rethink the options they offer their workers.

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

For large corporations, litigation payouts and legal fees may not be large enough to stop abortion coverage. The payout for such a lawsuit is $ 10,000, excluding legal fees.

But smaller businesses may not be able to bear these costs – or the 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,” said Berrett.

It is unclear whether companies could be held liable if employees travel out of state for an abortion due to company health policies. It is also unclear whether companies that do not offer abortion protection could be held liable if an employee uses insurance for part of an abortion visit.

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

The answers to the questions raised by the broad abortion law are unlikely to be answered until the litigation begins. The Biden administration sued Texas Thursday for stopping the law, calling it “unconstitutional.”

Large employers have largely remained 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.

“Employers will have to ask themselves, ‘Are we legally liable for these restrictions?’ “Said Berrett.

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