If you are planning a surrogacy journey or are expecting a baby via surrogacy, you will want to determine what funds and/or parental leave policies are available for your family. Scheduling an appointment with your benefits manager can be very helpful in understanding your employer’s policies and planning how to best utilize the available options. If you have a spouse or partner, you should both evaluate what options are available to maximize your family’s benefits. While every employer will have their own policies, below are some general topics you can address.
Benefits Through Your Employer
Your employer may offer specific benefits related to surrogacy. For example, American Express recently announced that it was offering benefits worth up to $35,000 for adoption or surrogacy (in addition to benefits available for infertility treatments) for employees who have worked there for at least one year. Ask your employer if they have any surrogacy benefits and, if they do, what are the requirements for accessing them. Also, ask if your employer has adoption benefits that may be transferable or applicable to surrogacy, particularly if your surrogacy arrangement involves a second-parent adoption.
Time Off Through Your Employer
Find out what your employer’s maternity and/or paternity leave policy is and whether that leave is paid or unpaid. Employers’ policies vary widely from no policy to very generous policies. For example, AmEx offers 20 weeks of fully paid maternity and paternity leave and Deutsche Bank in India just announced that they have made their paternity leave policy the same as their maternity leave policy- 26 weeks of paid leave. Be clear with your employer that you are welcoming your baby via surrogacy and make sure you are eligible. There is currently a lawsuit pending against Verizon for denying maternity benefits to a mother via surrogacy. Verizon’s position to date has been that their policy allows for maternity leave for women who deliver or adopt a baby. This is not an endorsement of Verizon’s position or a comment on whether that position is legally viable, but a caution to make sure you clearly understand your employer’s maternity and/or paternity leave benefits.
Family Medical Leave Act (FMLA)
The FMLA requires covered employers to provide job-protected, unpaid leave for up to 12 weeks per 12 calendar months for qualified medical and family reasons. To be eligible for FMLA leave, an employee must have worked for their employer for at least 12 months and have worked at least 1,250 hours over the past 12 months. A “covered employer” under the federal FMLA employs at least 50 employees, but some states have lower employee number thresholds than the federal threshold. You may not be eligible for FMLA leave if you work for a small business, work part-time, or have been at your job for less than 12 months. The pros of FMLA leave are that your job is protected and you continue to receive benefits, particularly health benefits, while you are on leave. The cons are that FMLA leave is unpaid and you must be eligible. Additionally, FMLA leave is intended to provide time off when no other option is available through your employer directly. You may not be able to access FMLA leave in addition to the leave provided by your employer, regardless of whether it is paid or unpaid.
Flexible Spending Account (FSA)
FSAs allow you to put aside pre-tax money to pay certain medical expenses. In 2017, the FSA contribution was increased to $2,600 per person. FSA funds cannot be used to pay expenses associated with using a surrogate (i.e. compensation, reimbursement, medications, insurance premiums/copays/deductibles), but CAN be used to pay costs associated with creating the embryos. If you pay out-of-pocket for IVF and/or IVF medications, fully funding your FSA could result in savings equivalent to your tax rate.
Adoption Tax Credit
The adoption tax credit includes both a tax credit for qualified adoption expenses and an income exclusion for employer-provided adoption assistance. Adopting your spouse’s child (generally referred to as a second parent or step-parent adoption) is excluded from the adoption tax credit. This credit has an income phase out starting at approximately $200,000. We encourage you to discuss your family circumstances with your accountant for an evaluation of whether you are eligible for this credit.
Pearl Surrogacy understands how much planning goes into building your family via surrogacy. We encourage you to talk with your employer about what benefits are available to you so you can plan for time off after the birth of your baby for family bonding time.