Family Law

A World First For Insurance Laws: Nevada Prohibits Surrogacy Discrimination

Congratulations, surrogates and intended parents in Nevada.

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(Image via Getty)

Nevada just became the first state in the country — and as far as I can tell, the first place in the world — to pass a law that specifically bars insurance companies from discriminating against women who choose to act as gestational surrogates. If that doesn’t sound exciting, well, I can’t help you. Because you have a heart of stone.

In any event, spearheading the Nevada bill was Kimberly Surratt, who is a prominent Nevada attorney specializing in assisted reproductive technology and family law. This is not Surratt’s first rodeo with the Nevada State Legislature. Surratt drafted and lobbied the current assisted reproductive technology law in the State of Nevada that includes gender-neutral and marital-status-neutral protections for Nevadans becoming parents through third-party reproduction — surrogacy, egg, sperm, or embryo donation. Surratt worked with Sarah Paige, an insurance expert with ART Risk Financial and Insurance Solutions, who testified in support of the bill. They must have done a pretty effective job, since the proposed bill was passed unanimously by both the Nevada State Assembly and Senate.

Surratt’s verbiage for the new regulation is straightforward. It provides that “an insurer that offers or issues a contract for hospital or medical services that includes coverage for maternity care shall not deny, limit or seek reimbursement for maternity care because the insured is acting as a gestational carrier.” For intended parents turning to surrogacy in Nevada to complete their families, that one sentence makes a world of difference.

Wait, Did The Law Already Prohibit Discrimination Against Surrogates?

As the legislation just closed this Monday and Surratt was still hard at work, I spoke with Paige about the impetus for the new law. She explained that over the last few years, many insurance companies in Nevada have been routinely denying coverage for women who act as gestational surrogates by refusing to provide maternity coverage. These are women who were already policyholders, and who would have been covered with maternity benefits if their pregnancy had been for their own family. An average pregnancy can cost up to $20,000. As a result of the denials, those substantial amounts must be paid by the intended parents, in addition to the other high costs of the surrogacy process.

Paige explained that the Affordable Care Act (“ACA”) mandates maternity care, and does not provide any carve out or exclusion for maternity care when the pregnancy is surrogacy-related. Paige also explained that while there was some initial concern by stakeholders that the Nevada bill would provide an additional mandate, the Nevada Department of Insurance ultimately concurred that the ACA already mandated the benefit. This, importantly, meant that the bill would have zero additional fiscal impact, and could proceed without further hearings. As a state whose legislature only convenes every two years, a pit-stop with a committee to assess financial impact would have surely meant at least another two years before the possibility of passage.

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Have We Seen This Before?

Although this was the first time a state legislature specifically took on the issue of surrogacy insurance discrimination, the Wisconsin Supreme Court took on the dispute in 2010. In the case of Mercycare Insurance Co. v Wisconsin Commissioner of Insurance, the insurer wrote into their policy an exclusion of “surrogate mothers” from maternity coverage. However, the state insurance commissioner concluded that that although a specific service can be excluded from policies, a specific subgroup of insureds cannot. That meant that an insurance policy could exclude maternity coverage altogether (this case was pre-ACA), but could not exclude maternity coverage because a policy holder was acting as a surrogate. The Supreme Court sided with the commissioner’s conclusions.

Protections Beyond the ACA

While the Nevada law is consistent with the ACA’s maternity care mandate, it provides additional protections. For one, if the ACA ever goes away (because I’ve heard it is controversial), Nevada insurance policies would still be required to provide gestational surrogates coverage when providing maternity care. Additionally, many insurers have employed a slightly more nuanced approach to surrogacy non-coverage. Instead of “excluding” surrogacy, some policies include a subrogation, or lien clause. For instance, a policy many provide that it will cover maternity costs, but, if the surrogate receives reimbursements or compensation in association with her choice to be a surrogate, the insurer will place a lien on the coverage up to the amount the surrogate received in compensation. Since a surrogate is often compensated for the process, that system can be like having no coverage at all. But now, the Nevada law prohibits both exclusion and “seeking reimbursement,” thus shutting down this alternative method of denying coverage.

Isn’t Infertility Hard Enough?

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The argument against coverage for surrogates is easy to understand — if a woman is being paid to be a surrogate, why should taxpayers or other policyholders bear the burden of her healthcare costs? But the reality is, it is not the surrogate who bears that burden. It is the intended parents. A couple or individual who has already struggled with infertility and then need to turn to surrogacy to have a child are further financially punished. On top of the need to pay for fertility treatments, without the surrogate having maternity coverage, they are forced to pay for her medical costs out of pocket. The results are often too high an obstacle for hopeful parents. While, of course, if they hadn’t suffered infertility in the first place, their own health insurance would have likely provided maternity coverage.

While a lightning rod for controversy, surrogacy pregnancies still are a minuscule percentage of overall pregnancies. So congratulations, surrogates and intended parents in Nevada. This is a big win for Surratt, Paige, and all of Nevada.

Ellen TrachmanEllen Trachman is the Managing Attorney of Trachman Law Center, LLC, a Denver-based law firm specializing in assisted reproductive technology law, and co-host of the podcast I Want To Put A Baby In You. You can reach her at babies@abovethelaw.com.

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