New "Patient Protection" Bills Could Destroy Employer-Sponsored Health Insurance


September 13, 1999

CONTACT: Richard Coorsh

(202) 824-1787

WASHINGTON, D.C. – Despite the assertions of Congressional sponsors, new so-called "patient protection" legislation would allow employers to be sued over health benefits voluntarily provided to their employees, and could destroy the employer-based health insurance system, according to a new legal opinion released today by the Health Insurance Association of America (HIAA).

The new HIAA legal opinion demonstrates that the Shadegg-Coburn bill introduced last week – as well as the "Dingwood" bill introduced last month – expressly authorize lawsuits against any employer shown to exercise any oversight over its health coverage. The opinion also states that the "shield" in both bills – which the bills’ sponsors claim would protect employers against lawsuits – would apply only if an employer gives up any involvement with any coverage decision.

Under these bills, even an employer’s simple act of choosing health coverage for employees would be considered exercising oversight over health coverage, thereby exposing the employer to the possibility of a lawsuit.

"This legal opinion shows how both bills offer employers who sponsor health coverage a ‘Hobson’s choice’ between the horrific and the horrendous," remarked HIAA President Chip Kahn. "Employers either could pay for higher cost coverage that they cannot control, or retain control and expose themselves to costly lawsuits. Given these choices, many employers are likely to throw in the towel and simply drop coverage altogether, leaving millions more Americans uninsured."

HIAA’s new legal opinion was prepared by Washington, D.C.-based attorney William G. Schiffbauer.

HIAA is the nation’s most prominent trade association representing the private health care system. Its members provide health, long-term care, disability, and supplemental coverage to more than 115 million Americans.


NOTE: HIAA’s new legal opinion is available at


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