A court filing shows the parties have agreed to dismiss all remaining claims, with each side bearing its own costs and attorneys' fees.
The agreement follows a federal judge's Jan. 7 ruling that, as a matter of law, the ACLU failed to provide any evidence that the Legislature's predominant motivation in passing the 2011 law was to make it more difficult to get abortions.
The Kansas law prohibits private insurance companies from offering coverage for abortions in their general plans except for when a woman's life is in danger. Kansas residents or employers who want abortion coverage must buy supplemental policies, known as riders.
"We are disappointed that the court's decision will stand, despite the fact that the American public believes that politicians have no place interfering with a woman's personal and private medical decisions," ACLU attorney Brigitte Amri said. "A woman should have the peace of mind of knowing that her insurance will cover her medical needs no matter what happens during her pregnancy.
"Although we are not able to continue with this case, we will continue to stand up for a woman's right to make the best choice for herself and her family."
The Kansas attorney general's office did not immediately return a phone message and email seeking comment on the court filing.
The case had been scheduled for trial in March to determine the larger question of whether the significant costs for abortions many women must now pay for themselves create a substantial burden on the federal right to an abortion. The joint stipulation of dismissal which prohibits the ACLU from raising the claims again or appealing the judge's earlier ruling effectively ends the case.
Women seeking an abortion in Kansas need to buy the insurance rider or pay for the procedure out-of-pocket if their insurance policies are new or were renewed after the law took effect in July 2011.
Before the law's passage, companies comprising 70 percent of the insurance market share in Kansas included abortion coverage in comprehensive policies, the judge noted. Between July 2010 and July 2011, the three major health insurers paid claims for 137 abortions.
The cost for an abortion at a clinic ranges from $450 to $1,675, and hospital abortions can cost upwards of $10,000.
The law was among several major anti-abortion initiatives approved by Kansas legislators and signed into law by Republican Gov. Sam Brownback, who called on lawmakers to create "a culture of life" after he took office in January 2011. Supporters of the insurance restrictions contended that people who oppose abortion shouldn't be forced to pay for such coverage in a general health plan.