← BLOG  |  NEWS

Texas Enacts New Rules on AI and Health Data Storage for Providers

31 Jul

Share

 

Update Applicable to:Effective Date
All Covered EntitiesSeptember 1, 2025  
Data Storage: January 1, 2026


What happened?

On June 22, 2025, Texas Governor Greg Abbott signed Senate Bill 1188 (SB 1188) into law, establishing new rules for how healthcare providers in Texas manage electronic health records (EHRs) and use artificial intelligence (AI) in medical care.


Overview:

Biological Sex at Birth: SB 1188 requires that all EHRs include a fixed field for a patient’s “biological sex at birth,” defined by reproductive traits.

  • This field can only be changed in cases of clerical error or diagnosed intersex condition.
  • While gender identity may still be recorded, it must appear in a separate, optional field.
  • Parents and guardians must be given full access to a minor’s health records unless restricted by law.

Data Security Standard: The law also sets strict data security standards.

  • All EHRs must be stored within the United States or its territories, including those managed by third-party vendors or cloud services.
  • Access to these records must be limited to individuals with a legitimate need, and healthcare providers must implement safeguards to protect patient privacy.

AI Tools: In terms of AI, SB 1188 allows healthcare professionals to use AI tools for diagnosis and treatment planning—but only with human oversight. Providers must review all AI-generated recommendations and disclose their use to patients.

Violations of the law: can result in civil penalties of up to $250,000, especially in cases involving misuse of protected health information.

  • Data storage requirements become enforceable on January 1, 2026.


Source References

Need help understanding how changes to employment laws will affect your business?

Learn more about how Vensure's Texas PEO services can help you navigate complex employment laws and keep your business compliant.


This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

Keep Your Business Compliant

Fill out the form below to receive monthly Employment Law Updates right in your inbox.

Keep Your Business Compliant

Fill out the form below to receive monthly Employment Law Updates right in your inbox.

Amazing!

You're all set.

Thanks for subscribing. Be on the look out for the Legal HR updates in your email.