An important note:  As the landscape of family formation changes, as do the insurance companies and their internal processes, billing and coding.  Now, in most states, there are specific coding that labels the pregnancy a surrogate pregnancy and will set off internal billing flags within the insurer's system.  It is illegal to lie or otherwise deceive  a doctor, nurse or an insurance company about a surrogacy pregnancy and can be charged as insurance fraud.  All parties could be subject to serious legal repercussions and it is never advised to be anything than truthful about the surrogacy arrangement with your insurance provider as well as medical staff. 

Insurance Options

Insurance varies from state to state and from employer to employer.  Below is a list of the various options for surrogate insurance and insurance to avoid at all costs. 

Surrogate Friendly Insurance

It is rare, but on some occasions, your surrogate may already have a policy in place for her and her family that does not have a surrogacy exclusion.  In this case, some agencies or surrogates may ask for a higher compensation for the surrogate or for the Intended Parents to cover the premium costs of the surrogate monthly.  In other scenarios the compensation remains the same and the surrogate continues to pay her own premiums.  Depending on the state and the age of the Gestational Carrier, this scenario can be a cost savings to the parent of $10,000 to $45,000.  While it may seem like the policy is surrogate friendly, it is still important to have the policy reviewed by a professional; often times employer based policies can have separate exceptions on top of the Explanation of Benefits provided by the insurer.  

Lien Policies

Landing in the middle of the spectrum, lien policies offer parents an affordable option that may ease some of the stress and financial burden of purchasing a new policy and finding a new OB/GYN. "Lien Policies" are insurers who have surrogacy language in the Explanation of Benefits that allows the insurer to bill some portion of the total cost back to the parents.  In some cases, the lien is never enacted and the surrogate is covered under her existing policy with no additional cost to the Intended Parents.  This type of policy may enact a lien at any time so parents need to be prepared to pay the costs.  Kaiser is a lien insurer and will always issue a lien of anywhere from 33% to 100% of the surrogate's base compensation.  It is important to have a professional negotiate the lien on your behalf.  

Open Market Policies

In the United States, without a "qualifying life event" (and no, pregnancy is not a qualifier), citizens are only able to purchase or change insurance companies once a year during a period known as Open Enrollment.  The Open Enrollment period varies from state to state but begins November 15th  for an effective date of Jan 1 of the following calendar year. During that time, parents are able to secure a surrogate friendly policy for the surrogate should one be available in the state and county where your surrogate resides.  It is possible that your surrogate lives in an area of the country or state that has no available policies that cover surrogacy.  Outside of the open enrollment period, there is only rare exceptions where you would be able to purchase an open market policy (surrogate/surrogate's husband lose their job and insurance, surrogate moves to a place where their current coverage does not exist, they no longer qualify for Medi-Cal and need a new policy).

Medi-Cal (Government subsidized policies)

In all surrogacy arrangements, it is not legal to use government subsidized insurance to pay for a surrogate pregnancy.  That being said, often times, because of the high financial threshold to qualify for Medi-Cal, surrogates will have a Medi-Cal policy.  This policy should not be used for surrogacy.  In order to get new coverage for your surrogate, she will either need to be disqualified from Medi-Cal for her surrogate compensation with a written disqualification letter or purchase a policy for her during open enrollment.  If your surrogate calls Medi-Cal and reports her new income, she needs to be clear that she wants to be disqualified and not that she is opting out of Medi-Cal.  The disqualification is a qualifying event that will allow you to purchase a new policy for your surrogate; opting out will not.  Medi-Cal is a slippery slope because you do not want to jeopardize your surrogate's future health insurance or the current insurance of the rest of her family.  It is always a good idea to reach out to a broker that can walk through the risk and reward scenario with both the Intended Parents and the surrogate. 

Surrogate specific policies

As the insurers willing to cover surrogate pregnancies declines, the rise in specific policies related to surrogacy increase.  Currently there are two notable policies available to purchase anytime throughout the year and are written specifically for surrogacy arrangements. Universal Family Insurance, underwritten by Llyods of London has been available for a number of years and has proven to be a viable option for surrogacy pregnancies.  This policy is separated into three parts and paid all up front: premiums, enrollment fee and the bucket.  For a singleton pregnancy, the enrollment fee is $2K and the premiums are $8K.  These two payments are non-refundable. The remaining $17K is put into a "bucket".  Payments are made from that "bucket" account throughout the pregnancy to cover the costs of labs, ultrasounds, OB care and delivery.  If there are any remaining funds in "the bucket" once all bills are paid, the remainder is returned to the Intended Parents. There are a couple of benefits to this policy; the policy does not start until confirmation of pregnancy so you do not waste months of premiums while you are awaiting transfer or suffering through failed transfer(s). The policy can be used with almost any doctor's office or hospital in the country. The policy covers up to $500,000.  

There is a new insurer, Prime, who is also offering a similar surrogate friendly policy.  The qualifications and parameters are more strict but the cost is less.  Because of their infancy, the policy does not have a lot of data to verify its credibility at the time this article is being written.  

Back Up Policies

In cases where it is unclear if the current policy of the surrogate will cover a surrogacy pregnancy, brokers offer secondary or "back-up policies" that can be enacted if necessary.  There are different costs and tiers with these policies, depending on the timing of the enactment or use of the policy.  Again, it is important to discuss this option with a qualified broker. 

Surrogacy Exclusion policies

There are several insurers who are an absolute no when it comes to surrogacy.  TriCare, the government contracted insurer of all military personnel and their families is a good example of this type of insurer.  It is never a good idea to use a surrogacy exclusionary policy in a surrogacy arrangement.  Insurers have a wide scope and breadth and will come after both surrogates and Intended Parents if these policies are used.  There are recorded cases of surrogates losing coverage forever, insurers coming back for large payments years later, housing liens, etc.  Policies that have a surrogacy exclusion are not to be used for any surrogate pregnancy. 

Nevada-- A notable exception

Due to the hard work of a few esteemed colleagues, Kimberly Surratt, Esq. and Sarah Paige, ArtRisk, Nevada passed a law in 2019 that requires all Nevada insurers to cover surrogacy pregnancies beginning January 2020.  All surrogates residing in Nevada that have any non-government subsidized policy will have surrogate friendly insurance beginning January 2020. Here are the exceptions: The governing body of any county, school district, municipal corporation, political subdivision, public corporation or other local governmental agency of the State of Nevada and federal entities such as TriCare. Although the Statute does not say they can discriminate - it is just silent on these entities. Each of these entities, within their policies, must decide whether they will have an exclusion or not. It is best to have a backup plan on self insured policies even if they are silent on surrogacy because they can make their own decisions.

It is the intention of Roots Surrogacy to provide transparency and education to the community that we serve. We understand that the nuances of surrogate insurance and exclusions can be complex but with an experienced team of knowledgeable staff, referrals and professional connections, even insurance can be mastered.  Please feel free to reach out to us (info@rootssurrogacy.com) for referrals to third party reproduction insurance specialists or to begin your path to parenthood through surrogacy or egg donation.