Adoption & Surrogacy Assistance Policy

VANDERBILT UNIVERSITY HUMAN RESOURCES POLICIES AND PROCEDURES
SUBJECT: ADOPTION & SURROGACY ASSISTANCE
EFFECTIVE DATE: July 1, 2019

The purpose of this policy is to outline the adoption and surrogacy assistance benefits available to eligible regular full-time faculty and staff (for eligibility criteria, see Adoption/Surrogacy Assistance Reimbursement Request form).

II.  REASON FOR POLICY

Vanderbilt University recognizes that faculty and staff may build their families in different ways. In order to support eligible employees, the University offers an Adoption/Surrogacy Assistance benefit to help reimburse certain medical and/or legal expenses in the successful adoption of a child or a surrogacy parenting arrangement.

This policy applies to all eligible Vanderbilt faculty and staff – see definition below. 

Participation in the Program ends on the earlier of: (1) the date the Eligible Employee ceases to be an Eligible Employee for any reason; provided, that Eligible Expenses incurred while an Eligible Employee are covered under the Program, subject to the benefit limitations under the Program, if submitted within 31 days of the employee losing his/her status as an Eligible Employee or (2) the date the Eligible Employee receives the maximum benefit under the program pursuant to the terms of the Program.

1. Adoption: Adoption of an Eligible Child who is legally adopted through public, private, domestic, international or independent means and who is not the stepchild of the adoptive parent.
2. Eligible Child: An "eligible child" is any individual who, at the time the qualified adoption expenses are incurred, is under age 18 and unmarried.
3. Eligible Employee: any Vanderbilt University employee who has completed at least one (1) year of continuous service in a full-time regular position at the time such employee applies for a benefit under this Plan. Dependents of employees are not considered eligible employees for Plan purposes.
4. Surrogacy: A legal agreement between intended parent(s) and a surrogate carrier to carry an embryo to term as a means for the intended parent(s) to become parent(s) of a child.

Eligible Employees who meet the established criteria listed in the Definitions section, shall be eligible for reimbursement for properly documented eligible expenses related to the Adoption or Surrogacy process. Applications for reimbursement must be submitted within six (6) months following the placement of the Eligible Child in the faculty or staff member’s home. If approved, reimbursement will be processed through Vanderbilt’s HR Payroll system, and the reimbursement will be added to the faculty or staff member’s paycheck. 

The benefit limit is two (2) children per lifetime per employee/family, regardless of any combination of adoption and/or surrogacy.

 A.    Adoption Benefit

The University will reimburse Eligible Employees for certain adoption expenses up to the maximum benefit amount of Five Thousand Dollars ($5,000) per eligible adoption. Adoption is limited to a child who is unrelated to the Eligible Employee.

1.     Eligible Adoption Expenses:

1. Adoption agency and placement fees
2. Attorneys' fees/court costs
3. Cost of temporary foster care for the child (during the adoption process)
4. Immunizations (during the adoption process and prior to the finalization of the adoption)
5. Reasonable and necessary transportation and lodging associated with the adoption
6. Other expenses that are:
   1. directly related to, and the principal purpose of which is for, the legal adoption of an eligible child by the eligible employee
   2. not incurred in violation of state or federal law
   3. not reimbursed by another source (e.g., grants, another employer)
7. Medical expenses not otherwise covered by any medical plan

2.     Ineligible Expenses:

1. 1. Medical examination fees for the adopting parents
   2. Cost of personal items such as clothing and food for either parents or child
   3. Expenses incurred prior to eligibility under the Plan
   4. Any expenses that violate state or federal law
   5. Costs paid using funds received from any federal, state, or local program
   6. Expenses allowed as a credit or deduction under any other federal income tax rule
   7. Expenses already paid or reimbursed by another employer or other party

NOTE:  Each employee/family may receive a maximum of two (2) benefits (two (2) children). If both spouses are Eligible Employees, the maximum is two (2) lifetime benefits total per family.

B.    Surrogacy Benefit

The University will provide up to a Five Thousand Dollar ($5,000) reimbursement to Eligible Employees for properly documented legal expenses and reasonable and necessary transportation and lodging associated with surrogacy parenting arrangements, as follows:

• the employee or spouse is genetically related to the child, and
• the child is a legal dependent of the employee, and
• the child will live in the household of the employee.

1. Eligible Surrogacy Expenses:

1. Attorneys' fees/court costs
2. Reasonable and necessary transportation and lodging associated with the surrogacy.

2. Ineligible Expenses:

1. Medical examination fees for the adopting parents
2. Cost of personal items such as clothing and food for either parents or child
3. Fees paid to the surrogate for her services
4. Fees paid to an egg donor or egg donor agency
5. Long term (more than thirty (30) days) storage of blood, umbilical cord, reproductive materials or other material (e.g., cryopreservation of tissue, blood and blood products)
6. Any expenses that violate state or federal law
7. Costs paid using funds received from any federal, state, or local program
8. Expenses allowed as a credit or deduction under any other federal income tax rule
9. Expenses already paid or reimbursed by another employer or other party

NOTE:  If both parents are employed by Vanderbilt University, only one (1) parent is eligible for reimbursement per adoption or surrogacy. The total benefit limit is two (2) children per lifetime per employee and surrogacy is combined with—not in addition to—the adoption benefit described above. 

C.    Related Benefit Information:

• At the time of placement, you may add your child to your medical, dental, and other eligible benefit plans. In addition, you may enroll in or change your flexible spending account. Changes must be made within thirty (30) days of the qualifying event.
• NOTE: An eligible employee who uses the Surrogacy Benefit is not eligible to also use the Adoption Assistance benefit for the child born of the surrogate mother.

D.    Possible Tax Implications

It is intended that this Policy meet the criteria and conditions set forth in Section 137 of the Internal Revenue Code pertaining to adoption assistance programs.

Generally, the adoption assistance benefit under this Policy to adopt an unrelated child is exempt from federal income tax while the assistance benefit for the adoption of a step-child or a child through surrogacy is taxable.  Depending upon your financial circumstances, the federal adoption tax credit may be more beneficial than the assistance benefit offered under this Policy.  Eligible employees are strongly encouraged to consult with an accountant, attorney, or other financial advisor to determine which option is more beneficial for you before applying for the assistance benefit offered under this Policy.

Vanderbilt University will not withhold federal income taxes from reimbursements. However, employment tax (FICA) withholding will be applied as required by government regulations.  NOTE:  Tax laws and regulations are subject to change and should be verified in your consideration to seek benefit assistance under this Policy.

An employee who claims or receives a benefit to which they are not entitled is subject to performance action, up to and including possible termination of employment.

Eligible employees may apply for reimbursement of eligible adoption expenses and/or surrogacy expenses upon placement of the eligible child in the faculty or staff member’s home. Applications for reimbursement must be submitted within six (6) months following the finalization of the adoption. If approved, reimbursement will be processed through Vanderbilt’s payroll system, and the reimbursement will be added to the employee’s paycheck. 

The completed Adoption/Surrogacy Reimbursement Form must be submitted with:

• Documentation of fees, costs and other expenses incurred in connection with the adoption/surrogacy of an Eligible Child (including detailed receipts, invoices, canceled checks, etc. – see above for covered expenses) 
• Documentation that indicates whether the child is a citizen or resident of the United States 
• For the adoption of an Eligible Child who is not a citizen or resident of the United States, a final decree of adoption by a competent authority of the foreign-sending country, as well as evidence that the child has been issued the appropriate visa from the State Department of the United States 
• For the adoption of an Eligible Child who is a citizen or resident of the United States, a final decree of adoption 

There are no FAQs currently associated with this policy.

• Forms                                       https://hr.vanderbilt.edu/forms/index.php
• Non-FMLA Leave policy            https://hr.vanderbilt.edu/policies/non-fmla.php
• IRS Taxability information           IRS Contact IRS Toll-Free number (1-800-829-1040) and See Notice 97-9 1997-2 I.R.B. 35, or visit the IRS website for information about taxation of this benefit at:  https://www.irs.gov/publications/p17#en_US_2013_publink1000272996    

GENERAL INFORMATION

Forms to apply for Adoption Assistance, Leave of Absence and FMLA are available at /forms.

Contact IRS Toll-Free number (1-800-829-1040) and See Notice 97-9 1997-2 I.R.B. 35 for information about taxation of this benefit.

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The policies and procedures that guide employment practices are intended to assist in consistent administration and compliance.  Vanderbilt reserves the right to modify its policies and practices, in whole or in part, at any time.  Revisions to existing policies and procedures, and the development of new policies and procedures, will be made from time to time at the discretion of the University.   When new policies are implemented or existing policies are revised, the University will notify members of the University community as soon as practicable.  However, where differences occur, the most recent policy as reviewed and approved by the University will take precedence.  The policies and procedures do not create a contract, implied or expressed, with at will employees at Vanderbilt.

Approved by Barbara Carroll, Chief Human Resources Officer and Associate Vice Chancellor

Approved by Eric Kopstain, Vice Chancellor for Administration