08 Sep 2009 Insurance Coverage for Surrogates
Wisconsin Supreme Court to Decide Whether An Insurer Can Deny Maternity Coverage to a Surrogate
The Wisconsin Court of Appeals, on September 3, 2009, certified a case to the Wisconsin Supreme Court involving whether an insurer can deny maternity coverage to an insured acting as a surrogate.
Two surrogates from Wisconsin, with health insurance under a group plan, were denied maternity coverage by MercyCare Insurance. One appealed to the Wisconsin Commissioner of Insurance, who determined that the exclusion was impermissible on the grounds that it violated WISCONSIN STAT. § 632.895(7), which provides, in part:
Every group disability insurance policy which provides maternity coverage shall provide maternity coverage for all persons covered under the policy. Coverage required under this subsection may not be subject to exclusions or limitations which are not applied to other maternity coverage under the policy.
MercyCare appealed the Commissioner’s decision and the trial court reviewed the case on a “de novo” basis, reversing the Commissioner’s decision and allowing MercyCare to exclude maternity coverage for the surrogate. (A “de novo” review is a form of appeal in which the reviewing court holds a full trial as if no prior trial had been held.)
The parties dispute the meaning of the second sentence of the statute. MercyCare argues that the statute means that whatever maternity coverage is provided in the policy must be provided to all insureds. Under this view, MercyCare is free to deny surrogacy coverage if it denies that coverage to all insureds. The Commissioner reads the statute to require that, if an insurer provides coverage for various maternity care procedures, the insurer must provide that same coverage to all insureds, regardless of the circumstances of how or why they became pregnant. Under this interpretation, an exclusion for surrogate mothers is impermissible because it non-uniformly denies some insureds coverage that other insureds receive.
The parties also dispute the proper standard of review when an agency (the Insurance Commissioner) interprets statutory language for the first time - the issue being whether the Commissioner’s review was one of first impression, which, if the case, allows a de novo review. The Commissioner argues that the agency has bee interpreting and administering insurance statutes for decades and therefore, the agency’s ruling should stand and the court had no authority to reverse the decision. MercyCare argues that the interpretation of the statute as applied to maternity coverage for surrogates is one of first impression, so the court’s de novo review (and ruling in its favor) should stand.
On September 3, 2009, the Wisconsin Court of Appeals certified the case to the Wisconsin Supreme Court for: (1) resolution of the interpretations of the “de novo” review standard applied in the case (citing many cases leading to competing reasonable interpretations on whether such review was appropriate); and (2) resolution of the question of whether an insurance company can deny maternity benefits under a group policy to insured women acting as surrogates.
*Citation: MERCYCARE INSURANCE COMPANY and MercyCare HMO, Inc., Petitioners-Respondents v. WISCONSIN COMMISSIONER OF INSURANCE, Respondent-Appellant. No. 2008AP2937. 2009 WL 2781964 (Wis.App.) Sept. 3, 2009.