THE ATTORSEY GENERAL 

OF TEXAS 

August 2, 1988 

Honorable Chet Brooks 

Chairman 

Committee on Health and 

Human Services 

Texas State Senate 

P. 0. Box 12068 

Austin, Texas 78711-2068 

Dear Senator Brooks: 

Opinion No. JM-937 

Re: Insurance coverage for 

in vitro fertilization 

(RQ-1334) 

You ask our opinion on a number of questions concerning 

a requirement imposed by the legislature that certain group 

health insurance policies provide coverage for in vitro 

fertilization procedures,1 or reproduction through fertilization of an ovum by a sperm outside of the body. Annas 

and Elias, In Vitro Fertilization and Embrvo Transfer: 

Medicoleaal Asvects of a New Technioue to Create a Familv 

17 Family L.J. 199 at n. 1 (1983). After describing th;? 

legislation, we will answer each of your questions in turn. 

The 70th Legislature amended the Insurance Code to 

mandate health insurance coverage for in vitro fertilization procedures in certain circumstances. Acts 1987, 70th 

Leg., ch. 526, at 2135. The legislation was effective on 

September 1, 1987, and applies to all policies and other 

evidence of coverage delivered, issued for delivery, or 

renewed after January 1, 1988. Id. The text of the statute 

follows. 

[In vitro fertilization ~procedure] 

Sec. 3A. (a) All insurers, nonprofit 

hospital and medical service plan corporations subject to Chapter 20 of this code, 

1. The statute also applies to entities such as health 

maintenance organizations and employer self-insurance plans. 

See aenerallv Chapter 20 of the Insurance Code. Our discussion of the law applies to all such entities. 

p. 4708 
Honorable Chet Brooks - Page 2 (JM-937) 

health maintenance organizations subject to 

the Texas Health Maintenance Organization Act 

(Chapter ZOA, Vernon's Texas Insurance Code), 

and all employer, multiple-employer, union, 

association, trustee, or other self-funded or 

self-insured welfare or benefit plans, programs, or arrangements that either issue 

group health insurance policies, enter into 

health care service contracts or plans, or 

provide for group health benefits, coverage, 

or services in this state for hospital, 

medical or surgical expenses incurred as a 

result of accident or sickness shall offer 

and make available to each group policyholder, contract holder, employer, multipleemployer, union, association, or trustee 

under a group policy, contract, plan, program, or arrangement that provides hospital, 

surgical, and medical benefits, coverage for 

services and benefits on an expense incurred, 

service, or prepaid basis for out-patient 

expenses that may arise from in vitro fertilization procedures, if the group insurance 

policy, contract, plan, program, or arrangement otherwise provides pregnancy-related 

benefits for the insureds, enrollees, subscribers, employees, members, or other 

persons covered under the policy contract, 

plan, program, or arrangement. 

(b) An offer made under Subsection (a) of 

this section is subject to this section. 

(c) A rejection of an offer to provide 

the coverage for services or benefits 

provided by Subsection (a) of this section 

must be in writing. 

(d) Benefits for in vitro fertilization 

procedures must be provided to the same 

extent as the benefits provided for other 

pregnancy-related procedures under the 

policy, contract, plan, program, or arrangement. 

(e) The offer to make the coverage available is required only under the following 

conditions: 

p. 4709 
Honorable Chet Brooks - Page 3 (JM-937) 

(1) the patient for the in vitro fertilization procedure is an insured, enrollee, 

subscriber, member, or otherwise covered 

employee or, person under the policy, contract, plan, program, or arrangement: 

(2) the fertilization or attempt at 

fertilization of the patient's oocytes is 

made only with the patient's spouse's sperm: 

(3) the patient and the patient's spouse 

have a history of infertility of at least 

five continuous years' duration or the 

infertility is associated with one or more of 

the following conditions: 

(A) endometriosis; 

(B) exposure in utero to diethylstilbestrol (DES): 

(C) blockage of or surgical removal of 

one or both fallopian tubes: or 

(D) oligospermia; 

(4) the patient has been unable to attain 

a successful pregnancy through any less 

costly applicable infertility treatments for 

which coverage is available under the policy, 

contract, plan, program, or arrangement: and 

(5) the in vitro fertilization procedures 

are performed at a medical facility that 

conforms to the American College of Obstetric 

and Gynecology guidelines for in vitro fertilization clinics or to the American Fertility 

Society minimal standards for programs of in 

vitro fertilization. 

(f) An insurer, health maintenance 

organization, or self-insuring employer that 

is owned by or that is part of an entity, 

group, or order that is directly affiliated 

with a bona fide religious denomination that 

includes as an integral part of its beliefs 

and practices that in vitro fertilization is 

contrary to moral principles that the 

religious denomination considers to be an 

essential part of its beliefs is exempt from 

P. 4710 
Honorable Chet Brooks - Page 4 (JM-937) 

this section's requirement to offer coverage 

for in vitro fertilization. 

Ins. Code art. 3.51-6, 5 3A. 

Several salient points should be noted in this statute. 

First, coverage for in vitro fertilization procedures 

is mandated only if the insurance policy also provides 

pregnancy-related benefits. Art. 3.51-6, 5 3A(a). Second, 

coverage in such instances need be made available only to 

the same extent that coverage is provided for pregnancyrelated procedures. Id. § 3A(d). Third, benefits for in 

vitro fertilization procedures may be limited to persons who 

have specified pre-existing medical conditions. Id. 5 3A(e). 

Finally, benefit providers and policyholders "directly 

affiliated with a bona fide religious denomination that 

includes as an integral part of its beliefs and practices 

that in vitro fertilization is contrary to the moral 

principles that the religious denomination considers to be 

an essential part of its beliefs" are exempt from the 

requirement to offer coverage for in vitro fertilization. 

Id. § 3A(f). 

Thus, a group ,policyholder may avoid the requirement to 

provide coverage for in vitro fertilization procedures by 

either ending u coverage for any pregnancy-related 

condition m meeting the test for a religious exemption.2 

We caution that the federal Pregnancy Discrimination 

Act of 1978, 42 U.S.C. section ZOOOe(k), requires that 

employees or their insured spouses disabled due to pregancyrelated medical conditions must be provided the same 

benefits as those furnished to other workers and their 

spouses for "all employment-related purposes, including 

receipt of benefits under fringe benefit programs . . . .I' 

Id. See also Newnort News Shivbuildina and Drvdock Co. v. 

-, EEOC 462 U.S. 669 (1983) and Attorney General Opinion 

2. We note that a policyholder who is entitled to an 

exemption on religious grounds from the requirement to 

provide coverage for in vitro fertilization procedures may 

continue to provide coverage for pregnancy-related conditions, while a policyholder unable .to obtain such an 

exemption on religious grounds must terminate coverage for 

all pregancy-related conditions before lawfully refusing 

coverage for in vitro fertilization procedures. We express 

no opinion on the constitutionality of this provision. 

P. 4711 
Honorable Chet Brooks - Page 5 (JM-937) 

JM-337 (1985). Thus, if an employer subject to the federal 

law terminates fringe benefit payments applicable to 

pregnancy-related conditions to avoid coverage for in vitro 

fertilization procedures, then the employer also must end 

u fringe benefit plans covering other medical conditions. 

I. 

You first ask: 

Under article 3.51-6, section 3A of the 

Insurance Code, does the group policyholder 

or the individual employee covered under the 

group policy have the right to reject coverage for in vitro fertilization? 

The Insurance Code requires that group accident and health 

insurance policies be issued to those who are denominated by 

the code as the l'policyholder.l' Ins. Code art. 3.51-6, 

0 l(a) (l)-(6). See, e.a., art. 3.51-6, 5 l(a)(l) ("policy 

issued to an employer . . . who shall be deemed the policyholder, insuring employees of such employer for the benefit 

of persons other than the employer."). Beneficiaries under 

group insurance policies are issued a "certificate of insurance," and not a "policy." Ins. Code art. 3.51-6, 9 l(a)(c). 

Likewise, section 3A of the code which mandates coverage for in vitro fertilization clearly identifies the 

policyholder as the entity to which an offer for coverage 

for in vitro fertilization must be made. Ins. Code art. 

3.51-6, § 3a(a), (b). The policyholder may reject the offer 

of coverage and such rejection must be in writing. L at 

§ 3A(c). Nowhere is it provided that individuals who are 

merely the beneficiaries under a policy of insurance issued 

to their employer have any right to reject such element of 

the group insurance coverage. 

II. 

You next ask: 

If an insurer issues a group policy to a 

company whose headquarters are domiciled 

outside Texas but the group policy covers 

Texas-based employees, ' 

required to offer covera:: 

the insurer 

for in vitro 

fertilization to [the] Texas employees? 

and 

p. 4712 
Honorable Chet Brooks - Page 6 (JM-937) 

If the group policyholder has the right to 

reject coverage under section 3.51-6, g 3A of 

the Insurance Code, does the company whose 

headquarters are domiciled outside of Texas 

have the right to reject coverage for in 

vitro fertilization on behalf of its Texas 

employees? 

Article 21.42 of the Insurance Code provides that: 

Any contract of insurance payable to any 

citizen or inhabitant of this State by an 

insurance company 

g:ate 

corporation doing 

business within this shall be held to 

be a contract made and entered into under and 

by virtue of the laws of this State relating 

to insurance, and governed thereby, notwithstanding such policy or contract of insurance 

may provide that the contract was executed 

and the premiums and policy (in case it 

becomes a demand) should be made payable 

without this State, or at the home office of 

the company or corporation issuing the same. 

Ins. Code art. 21.42. 

Article 1.14-1 of the Insurance Code sets forth the 

transactions which constitute "doing an insurance business 

in this state." Ins. Code art. 1.14-1, § 2(a). Whether an 

insurance company is doing business in Texas is a question 

of fact. & 

If an insurance company doina business in Texas issues 

a group insurance policy to an out-of-state employer for the 

benefit of its employees in Texas, article 21.42 applies, 

and the provisions in article 3.51-6 relating to mandatory 

coverage for in vitro fertilization procedures govern the 

policy. John Hancock Mutual Life Ins. Co. v. Schroeder, 349 

F.2d 406 (5th Cir. 1965); General American Life Ins. Co. v. 

Rodriauez, 641 S.W.Zd 264 (Tex. App. - Houston [14th Dist.] 

1982, no writ); Locomotive Ena. & Cond. Mut. Prot. Ass'n v. 

Bush, 576 S.W.Zd 887 (Tex. Civ. App. - Tyler 1979, no writ). 

Cf. Howell v. American Live Stock Ins. Co., 483 F.Zd 1354 

(5th Cir. 1973) and Austin Buildina Comvanv National 

Union Fire Ins. co., 432 S.W.Zd 697 (Tex. T968). See 

aenerallv Cox, Grouv Insurance Contracts for Emvlovees, 38 

Tex. L. Rev., 211, 230 (1959). 

But the courts have held that group insurance policies 

issued to an employer domiciled outside the state for the 

P. 4713 
Honorable Chet Brooks - Page 7 (JM-937) 

benefit of its employees in Texas by insurers not otherwise 

"doina business" in the state are governed by the law of the 

place where the policy is issued, and not by the Insurance 

Code. Boseman v. Connecticut General Life Ins. co., 301 

U.S. 196 (1937) (interpreting former article 5054, V.T.C.S., 

now article 21.42 of the Insurance Code); Schroeder, SUE?Z, 

Metrovolitan Life Insurance Co. v. Wann, 109 S.W.Zd 470 

(Tex. 1937). 

.- 

However, ruling case law in Texas on the choice-of-law 

issues implicit in your queries has changed completely since 

the decision in Boseman and the various Texas cases which 

rely on it, including decisions issued as recently as 1982. 

In Roseman, the United States Supreme Court applied 

what now might best be considered as the "traditional" 

choice of law rule for determining the applicable law 

governing the contract performance questions -- the socalled "lex loci contractus/place of performance" rule. 

Boseman, 301 U.S. at 201. See aenerallv Stoles and Hay, 

Conflict of Laws 55 18.14-18.15 (1984) and Multum non 

multa -- Festschrift fur Kurt Livstein, 251, 256 (P. Feurstein and C. Perry eds. 1980). See also Restatement First, 

Conflict of Laws, 8 331 (1934). 

In 1984' in a seminal shift in the choice of law 

regime, theTexas Supreme Court announced that the "lex loci 

contractusNq doctrine, including the "place of performance" 

rule would no longer be followed. Instead, the law of the 

state with the most significant relationship to a particular 

substantive issue concerning the performance of a contract 

obligation is to be applied, absent a valid choice of law 

clause in the contract dictating otherwise. Duncan v. Cessna 

Aircraft Co., 665 S.W.2d 414 (Tex. 1984). 

The rule announced for the resolution of choice-of-law 

in Duncan follows that in the current version of the 

Restatement of Laws published by the American Law Institute: 

(1) A court, subject to constitutional 

restrictions, will follow a statutory directive of its own state on choice of law. 

(2)~ When there is no such directive, the 

factors relevant to the choice of the applicable rule of law include: 

(a) the needs of the interstate and 

international systems, 

p. 4714 
Honorable Chet Brooks - Page 8 (JM-937) 

(b) the relevant policies of the forum: 

(c) the relevant policies of other interested states and the relative interests of 

those states in the determination of the 

particular issue, 

(d) the protection of justified expectations, 

(e) the basic policies underlying the 

particular field of law, 

(f) certainty, predictability and 

uniformity of result, and 

(g) ease in determination and application 

of the law to be applied. 

Restatement (Second) of Conflict of Law, 5 6 (1971). m 665 

S.W.Zd at 426. 

In light of the adoption of the restatement test by the 

Texas Supreme Court in Duncan, we think that even in the 

case of an insurance company not doina business in Texas 

which issues policies to out-of-state employees for coverage 

of their Texas employees, a court would probably apply the 

substantive provisions of Texas insurance law to the contract, thus subjecting such contract requirements relating 

to coverage for in vitro fertilization procedures set out in 

article 3.51-6, section 3A of the Insurance Code. 

SUMMARY 

An employer furnishing a group health 

insurance policy for the benefit of its 

employees in Texas is the "policyholde?? 

within the meaning of a provision of the 

Insurance Code which grants to VVpolicyholders" the right to reject insurance 

coverage for in vitro fertilization procedures. Ins. Code art. 3.51-6, § 3A. The 

Insurance Code does not extend to employee 

beneficiaries of group health insurance plans 

the right to reject coverage for in vitro 

fertilization procedures. Under current 

choice of law rules, a court would probably 

hold that article 3.51-6, section 3A, of the 

Insurance Code applies to contracts for group 

P. 4715 
Honorable Chet Brooks - Page 9 (JM-937) 

health insurance entered into by employers 

located outside of the state for the benefit 

of employees within the state, whether or not 

the insurance company is otherwise "doing 

business" in Texas. 

Very truly yo s L/ A/;, ti 

JIM MATTOX 

Attorney General of Texas 

MARY KELLER 

First Assistant Attorney General 

LOU MCCREARY 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAKLEY 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Don Bustion and 

Susan L. Garrison 

Assistant Attorneys General 

P. 4716