Why surrogacy needs its own insurance plan

A gestational surrogacy arrangement involves at least three parties with different insurance needs: the gestational carrier (surrogate), the intended parents and the baby. Medical costs for pregnancy and delivery can be substantial, and complications are possible. Surrogacy contracts usually make the intended parents responsible for those costs, so understanding exactly what the carrier's health plan will pay, before an embryo transfer, is one of the most important steps in the process.

What the Affordable Care Act guarantees, and what it does not

According to HealthCare.gov, all Marketplace plans must cover ten essential health benefits, including pregnancy, maternity and newborn care, both before and after birth. HealthCare.gov also states that if you are pregnant when you apply, a plan cannot reject you or charge you more because of the pregnancy. Grandfathered plans are not required to follow all of these rules.

Two practical limits matter for surrogacy:

  • Enrollment timing. Outside open enrollment you need a qualifying life event to buy a Marketplace plan. HealthCare.gov lists events such as losing coverage, marriage, moving and having a baby or adopting a child; it does not list becoming pregnant. A carrier without suitable coverage should secure it before the transfer.
  • Benefit mandates do not guarantee no exclusions. A plan may cover maternity in general and still contain wording that limits or recovers costs related to surrogacy.

Surrogacy exclusions and reimbursement clauses

Some plans exclude surrogate pregnancies outright. In Moon v. Tall Tree Administrators (US Court of Appeals for the Tenth Circuit, May 19, 2020, unpublished), a hospital's self-funded employee benefit plan governed by ERISA excluded "pregnancy charges acting as a surrogate mother." The court agreed with the lower court that the plan unambiguously excluded all medical coverage related to a surrogate pregnancy, even though the plan covered pregnancy in general.

Other plans pay the claims but include a reimbursement or lien clause that lets the insurer recover costs from the compensation the surrogate receives. The practical effect can be similar to an exclusion. Because self-funded employer plans are governed mainly by federal ERISA rules rather than state insurance law, state protections may not reach them. Always identify whether a plan is fully insured or self-funded.

How to review a carrier's health plan

  1. Obtain the full plan document or summary plan description, not just the summary of benefits.
  2. Search for the words "surrogate," "gestational carrier," "third party," "reimbursement," "subrogation" and "lien."
  3. Confirm whether the plan is fully insured (state-regulated) or self-funded (ERISA).
  4. Check deductibles, out-of-pocket maximums and network rules, and agree in the contract who pays them.
  5. Ask a reproductive law attorney to review the findings; many agencies require a formal insurance review.

Surrogacy-specific and backup policies

When the carrier's plan excludes surrogacy, or the review leaves doubt, intended parents typically buy coverage designed for gestational carriers or a backup policy that responds if the primary plan denies claims. These products are offered by a small number of specialist insurers and programs. Compare the effective date (it should start before transfer), maternity and complication limits, pre-existing condition rules, network, and whether newborn care is included. Budget for possible gaps such as deductibles and non-covered fertility medication.

Other insurance to arrange

  • Life insurance for the carrier. Contracts commonly require a term life policy for the carrier during the pregnancy and for a period afterward, with her family as beneficiary. See life insurance.
  • Disability or lost-wage protection. Bed rest or complications can interrupt the carrier's income; contracts usually address lost wages, and disability insurance can help fund that obligation.
  • The baby's health coverage. Plan how the newborn will be added to the intended parents' plan from birth. Under HealthCare.gov rules, having a baby is a qualifying life event for the parents' household.
  • International intended parents. Foreign parents may not qualify for US plans and should arrange coverage for the baby's stay in the US and for travel home. See travel medical insurance.

State law and international notes

Surrogacy law differs significantly between states, and some states regulate how insurers may treat surrogate pregnancies. Outside the US, rules on surrogacy, and therefore on insurance, range from permitted to prohibited. Coverage decisions should always be checked against the law where the carrier lives and where the birth will take place.

How Polis Re can help

Polis Re helps intended parents and agencies compare health, life and disability options for surrogacy journeys and request quotes. Policies are issued by licensed insurers and placed through licensed producers in your state; Polis Re does not give legal advice. Request a quote or read our guide on choosing health insurance.