Surrogacy is an amazing experience for many intended parents. But there are a few surprises along the way that you can potentially avoid with some careful planning. One of them is called a medical insurance lien—and it’s something that often catches intended parents by surprise.
Medical insurance liens can be confusing. This article explains everything you need to know about medical insurance liens so that you can prepare yourself financially before your surrogate delivers your baby.
What is a Medical Insurance Lien?
A medical insurance lien (MIL) is when your surrogate’s health insurance provider places a claim on any compensation she receives from you as part of the surrogacy arrangement in order to pay her out-of-pocket expenses related to pregnancy and delivery.
Insurance companies have the right to decide that paid surrogacy is not a valid use of their coverage since the surrogate is also being compensated by intended parents. The lien amount is generally calculated as a percentage of the surrogate’s compensation or the cost of medical services—whichever number is lesser of the two.
For example, a surrogate who earns $48,000 in total compensation may be assessed a $16,000 lien as it is 1/3 of her compensation. But, if the surrogate’s medical costs during the pregnancy and delivery came to $13,500, the insurance company would bill for $13,500 since it is less than 1/3 of the surrogate’s compensation. Should the bills total $32,000, the insurance company would still only bill the maximum amount, which in this case is $16,000.
How to Prepare for the MIL as an Intended Parent
There are a few ways you may be able to avoid this situation altogether. The first is to take preventive measures before signing your surrogacy agreement and the second is to allow your agency, like GSHC Surrogacy, to help you through each step of the way.
The surrogacy lien will typically arrive 3-4 weeks following the birth of the baby. However, MIL’s can vary from state to state so we highly recommend you go through a lawyer to negotiate the agreement with the insurance company on your behalf, as it can be complicated and fraught with many potential implications that may not initially seem obvious.
In California, there are certain counties that assess medical insurance liens and not others. GSHC Surrogacy Agency works with ART Risk Solutions to help intended parents identify gestational surrogates that are not subject to this lien based on their location.
Less Stress, More Time with Your Baby
Working with ART Risk Solutions helps us provide you with peace of mind and lets both the intended parent(s) and surrogate worry about what’s important—the journey ahead, rather than bills received during and after the surrogacy process.
This process helps minimize your financial risk and takes the guesswork out of these often-complicated medical insurance liens. We know that time and money are valuable resources for our clients. So, once your baby is delivered, we’ll handle all the paperwork so that you can spend time bonding with your newborn.
Our team at GSHC Surrogacy has been there before, and we’re here to answer any questions you may have about what steps to take to guarantee you’re legally and financially protected. We’ll make sure everything goes smoothly for you throughout the entire process of negotiating and potentially avoiding, a medical insurance lien during your surrogacy journey.