Have no fear, ART Risk Solutions is here! Within this blog post, we have provided our Top 5 most commonly asked questions for Intended Parents whose surrogate already has an insurance policy. If your surrogate does not have insurance, see our next post for the Top 5 questions for Intended Parents whose surrogate does not have insurance. We know that starting a family is both exciting and terrifying. Yet, overwhelming is the best word to use when there is SO much to consider with a surrogate pregnancy. Our hope is that the answers below will help you navigate through this part of the journey, answer questions you may have, and help calm a few of those nerves surrounding the topic of insurance concerns.
The surrogate we are considering or have been matched with already has insurance…
1) Is there a chance our surrogate’s insurance won’t cover her maternity claims? How can an insurance carrier not cover surrogacy?
Insurance carriers are not required to cover a surrogate pregnancy. While individual plans under the Affordable Care Act are required to cover the maternity of their members, some insurance carriers see surrogacy as an elective procedure and therefore consider surrogacy as Not Medically Necessary. Other carriers view the Intended Parents as the financially responsible party, and therefore, will not cover their member acting as a surrogate, but will cover the hiring of a surrogate if the Intended Parent is a member. In other circumstances, when individuals have insurance through their employer, the employer may have rights in determining what claims will and will not be paid for, especially with Trust Funds accounts or Union plans, as all claims are processed by a board for approval. In these circumstances, the employer or third-party administrator can decide what will and will not be covered. Consequently, we recommend having an Insurance Verification completed by our ART Risk Team before deciding to use a surrogate’s insurance policy for a surrogacy journey.
2) What is an exclusion and how does that apply to surrogacy?
When our Insurance Verification department reviews the insurance policies, we look for certain language regarding surrogacy. If a plan is “silent” that means that there is absolutely no language within the policy regarding surrogacy, gestational carriers, host uterus, etc. A silent plan is not necessarily negative, as several insurance carriers do not include language regarding surrogacy in their booklets, yet still cover their members acting as a surrogate. An “exclusion” is a specific service that the insurance carrier will NOT cover. Some companies have exclusions that state they will NOT cover the maternity claims of their members if they are acting as a surrogate. Because of this, we recommend having insurance policies verified before deciding to use the policy for a surrogacy journey to be educated with the noted financial risks involved.
3) Our surrogate has a plan through Covered California (or another state/federal exchange). How would this insurance work for her pregnancy?
Covered California is the name for the healthcare exchange in the state of California. The Healthcare Exchange is a nationwide marketplace where individuals can apply for new insurance and have the potential to receive a subsidy from the government to help them pay for their insurance. The exchange abides by the same Open Enrollment dates (November 1st– December 15th in most states). The only difference is the potential for a subsidy. The Healthcare Exchange is a great resource for individuals who may struggle to afford the rising costs of individual insurance plans. However, if you apply for insurance through the Healthcare Exchange you are obligated to inform them of any changes in income. This includes any compensation for surrogacy. Any changes in income may decrease the amount that the surrogate is receiving as a subsidy or make her ineligible for her subsidy for the given insurance plan; in which case she (or the Intended Parents) would be responsible for the full amount of the insurance. If the surrogacy financial compensation is not reported, all will be rectified on tax returns when filing the following year, which of course can get messy! We do recommend staying off exchange and off subsidized plans if the surrogacy is being financially compensated.
4) Our surrogate has Medicaid coverage. Can she use her Medicaid for surrogacy?
Medicaid is the government-funded program that allows families and individuals with significantly low incomes, who cannot afford health insurance, to have insurance. Just like with the Healthcare Exchange, any individual with Medicaid needs to inform their designated Medicaid Caseworker of any changes in income, including compensation for surrogacy. At that point, the amount of compensation may make the individual ineligible for their Medicaid benefits. This would be considered a “special circumstance” loss of coverage and the surrogate would have 60 days from that loss of coverage date to apply for a new primary policy, regardless of the time of year. Please note, some state’s Medicaid will NOT allow the policy to be used for surrogacy.
5) We know that sometimes third parties are responsible for medical bills, just like if you are in a car accident. How would Third Party Liability apply to us as Intended Parents?
Third Party Liability refers to the financial responsibility of a third party, when that third party is responsible for the member’s illness or injury. This is most often used for situations like car accidents when someone who is not the member is responsible for the accident, and therefore the injuries. This is also used for situations where a member is injured/made ill due to work circumstances, and therefore coordination with Workers’ Compensation would come into play. Some insurance carriers have specific third-party language regarding surrogacy, where it is stated that they will cover their member’s pregnancy, but they will ask the Intended Parents to reimburse them for the maternity expenses. This could be anywhere from the full amount, to a small percentage, and some insurance carriers request the surrogacy contract be submitted so they can request the exact amount the Intended Parents are responsible for. Always pay close attention to any subrogation/lien/right to reimbursement language. To be clear of this type of language, we recommend an Insurance Verification.
The surrogate we are considering or have been matched with does not have insurance or it has been verified that her policy will not cover surrogacy. Now what?
1) What is an ACA Plan?
ACA stands for the Affordable Care Act; this was a health care policy enacted in 2010 that set new standards for health insurance in the U.S. This includes mandating maternity coverage. However, Grandfathered Plans, which are plans that existed before the ACA was enacted, are not subjected to the same standards. Because of this, Grandfather Plans are not required to cover the maternity claims of their members. Individuals can apply for new ACA insurance plans during a stated time period (November 1st – December 15th in most states) called Open Enrollment. An ACA plan cannot be purchased outside the Open Enrollment period unless there is a need for special enrollment (a qualifying life event including: loss of health coverage not due to premium payments lapsing, moving, getting married, getting divorced, or change in employment with health insurance not being offered).
2) What is Open Enrollment and when does it begin/end, and are there any exceptions?
Open Enrollment is a set time-period (November 1st – December 15th in most states) where individuals who need a new insurance policy can enroll in a new, major medical plan for the upcoming year. These are government mandated dates and are not decided by the insurance companies or brokers. The only exclusion to this rule is Nevada, where residents can enroll year-round. Surrogates may choose to enroll in a new plan for a variety of reasons: they did not have insurance before, their insurance did not cover surrogacy, their OB/GYN and delivery hospital were not in-network, etc. If an individual does not apply during the Open Enrollment period, there are still options. Universal Family Insurance offers primary coverage that can be applied for all year, as well as back-up policies and Bridge the Gap plans. However, these plans tend to be more expensive than major medical ACA plans, especially when it comes to delivery, which is why we recommend any surrogates who need new insurance to apply during Open Enrollment. If for whatever reason, the surrogate loses her current insurance during the course of the year, (she loses her job and therefore she loses her employee insurance, she moves to a new location where her insurance isn’t applicable, she gets married/divorced and that changes the nature of her insurance, etc.) this would be considered a “special circumstance” and the surrogate would have 60 days from the loss of coverage, regardless of the time of year, to apply for a new primary insurance plan.
3) Our surrogate lives in one state, and we live in another. Can we get our surrogate insurance for our state, so she can deliver near our home?
No. Some plans allow the covered member to cross state lines, however residency is still required. Each state has its own residency requirements, and the individual who has the insurance policy must meet those residency requirements. We most often get this question when the surrogate lives in one state and the Intended Parents live in another, and they want the baby delivered in the Intended Parents’ resident state. The surrogate would not be able to get insurance in the Intended Parents’ state unless she was also a resident. For example: If a surrogate lives in California and the Intended Parents reside in Colorado, the surrogate would only be able to get insurance in California. If she were to deliver in Colorado, the Intended Parents would have to consider the cost of paying for her delivery and inpatient fees completely out-of-pocket. This also applies to international Intended Parents.
4) We are choosing new insurance for our surrogate. Will she still be able to see her OB/GYN and deliver at her favorite hospital?
With every plan, there are some doctors and facilities that accept that particular plan and some that don’t. If a facility does not accept the insurance, then you would be responsible for paying for the full amount of the medical bill. For example, people with Kaiser Permanente only have coverage at a Kaiser facility, and if you want to be a patient at a Kaiser facility, you need to have Kaiser insurance. We get a lot of questions from Intended Parents and Agencies about whether the surrogate’s OB/GYN and preferred delivery hospital are in-network with her plan. This is important to check, especially if the surrogate is on a new insurance plan, so that you can be sure you will not be paying out-of-pocket for her prenatal visits and delivery. However, it is equally important for Intended Parents to verify that their own insurance is accepted at the chosen delivery hospital, or they could be responsible for paying for the full amount of their baby’s hospital stay. This could be extremely expensive, especially if the baby needs to stay in the Neonatal Intensive Care Unit, or NICU. For example, if a surrogate has Kaiser insurance and delivers at a Kaiser facility, her hospital fees will be covered. However, if the Intended Parents do NOT have Kaiser, they would be responsible for the full amount of the baby’s hospital bills.
5) Someone had recommended a backup plan. Is this a good idea?
We recommend backup policies be purchased when there is not a full guarantee that the surrogate’s current insurance carrier would cover a surrogate pregnancy. The backup policy then serves as a safety net. If the primary insurance carrier chooses to deny a member’s maternity claims, the back-up policy would then come into effect to cover those costs. The back-up policy would only be activated if the claims were denied. We do NOT recommend that surrogates use ACA plans as secondary insurances, as primary ACA plans can deny claims for up to two years after the claims have been submitted, but secondary ACA plans can only backtrack a few months, potentially leaving the Intended Parents/Surrogate liable for the full amount of the maternity fees.
Hopefully this has answered a few of your questions, but we are always available to discuss any further concerns you may have. You can reach us at firstname.lastname@example.org or by calling us at 888.799.7077.