|A New Benefit Can Make Adoptions Easier
April 21, 2009,
Volume 55, No. 30
Starting a family or adding to your existing family is a special time in your life. If you’re expanding your family by adopting a child, you’ll soon be able to take advantage of a new benefit being rolled out by the Division of Human Resources and the Provost’s Office.
While there may be varying reasons behind the decision to adopt a child, all adoptive parents face significant financial and personal implications when bringing a new child into their lives. To ease the financial impact, Penn is adding a benefit that may allow eligible faculty and staff to be reimbursed for up to $5,000 in qualified adoption expenses. This new benefit will be available as of July 1, 2009, and can be utilized for adoptions that were finalized on or after January 1, 2009.
In the meantime, Penn already provides benefits and resources to help you in all phases of the adoption process, from the initial decision to adopt to the reality of bringing your new child into your home. A wealth of information about adoption is available through our free Worklife Resources services. Penn also offers several options for taking time away from work as you go through the adoption process.
For full details on the new adoption benefit—including who’s eligible, what are qualified adoption expenses, and who are eligible children—please read the Adoption Assistance Policy below. You can also find the policy, as well as links to the other University benefits and resources that pertain to adoption, on the Human Resources website at www.hr.upenn.edu/Quality/Worklife/Adoption.aspx
If you have any questions, please contact Human Resources at (215) 573-2471 or firstname.lastname@example.org, or the Provost’s Office
— Division of Human Resources
OF RECORD: University of Pennsylvania Adoption Assistance Policy
Policy No: 413
Effective Date: July 1, 2009
The purpose of the University of Pennsylvania Adoption Assistance Policy is to provide financial support to eligible Penn faculty and staff members who are adopting a child. The Plan document governs the provisions of the Plan. The following details supplement the Plan with information to help faculty and staff avail themselves of this benefit.
All active full-time faculty with a benefits-eligible title, regular full-time staff, and limited service employees are eligible to participate in the Plan after completing their first year of employment. Time as a temporary, part-time, or student worker is not counted toward this one year of employment requirement. To be eligible, a limited service staff member must work at least 35 hours per week for nine or more months of the year. If an employee is covered by a collective bargaining agreement, the employee will be eligible to participate in the Plan only to the extent provided in the provisions of the applicable collective bargaining agreement.
413.2 Adoptions Covered
Adoptions are eligible for reimbursement when the following conditions are met:
• The faculty or staff member has completed a year of employment with Penn and meets the eligibility criteria (see Section 413.1).
• In the case of a foreign adoption, the adoption has been finalized.
• In the case of the adoption of a child who is a citizen or resident of the United States, the adoption proceedings have been finalized or formally terminated.
• The adoption was finalized (foreign and domestic adoptions) or formally terminated (domestic adoptions only) on or after January 1, 2009.
• The reimbursement request is submitted within six (6) months of the date of the documentation of the adoption’s finalization (foreign and domestic adoptions) or formal termination (domestic adoptions only).
• The expenses meet the definition of “qualified adoption expenses” (see Section 413.3).
• The child meets the eligibility criteria (see Section 413.4).
413.3 Qualified Adoption Expenses for Reimbursement
The Plan provides reimbursement only for “qualified adoption expenses,” which are reasonable and necessary expenses that the faculty or staff member incurs in the form of:
• Court costs,
• Attorney’s fees,
• Traveling expenses, including the amount spent for lodging and meals, necessary for finalizing the adoption or picking up the child, and
• Other expenses directly related to, and whose principal purpose is for, the legal adoption of an eligible child.
The following expenses are not eligible for reimbursement under the Plan:
• Expenses incurred in violation of state or federal law,
• Expenses incurred in carrying out any surrogate parenting arrangement,
• Expenses incurred in connection with the adoption of a child of the eligible faculty or staff member’s spouse or domestic partner.
413.4 Definition of Eligible Child Under the Plan
In general, the term “eligible child” means any child who has not attained age 18 or who is physically or mentally incapable of self-care and who is not the child of the employee’s spouse or domestic partner.
413.5 Application Procedures for Reimbursement
To obtain reimbursement, an eligible employee must submit all of the following:
• A completed Adoption Cost Reimbursement Request Form
• Documentation of all fees, costs and other expenses incurred in connection with the adoption of an eligible child (including detailed receipts, invoices, canceled checks, etc.)
• For the adoption of an eligible child who is not a citizen or resident of the United States: 1) a final decree of adoption by a competent authority of the foreign-sending country establishing a parent-child relationship under the laws of the foreign-sending country, as well as 2) 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 or documentation of the termination of the adoption proceedings.
• Reimbursement requests must be submitted within six (6) months of the date of the documentation of the adoption’s finalization (foreign and domestic adoptions) or formal termination (domestic adoptions only).
• Documentation of all expenses must be submitted at the time you submit the reimbursement request; additional expenses submitted afterwards will not be reimbursed.
The reimbursement request form and substantiating documents should be sent as follows:
Intramural mail: HR-QOWL, 3401 Walnut, Suite 527-A/6228 or via
U.S. Mail: Human Resources–Quality of Worklife,
University of Pennsylvania,
3401 Walnut Street, Suite 527-A
Philadelphia, PA 19104-6228
413.6 Reimbursement Limits
A maximum of $5,000 of “qualified” expenses may be reimbursed for the adoption of an eligible child. There is a limit of up to two adoptions per household for the lifetime of employment with the University. If siblings are adopted simultaneously, this counts as one adoption for the household and up to $5,000 of reimbursements is allowed for each child adopted at that time. The $5,000 maximum reimbursement for one eligible child is an aggregate rather than an annual amount, even if the expenses occur over a period of years.
413.7 Reimbursement Process
The Quality of Worklife Office will review requests for reimbursement and determine the adoption costs qualified for reimbursement, up to the reimbursement limits. After all questions have been resolved about the costs and accompanying documentation (i.e., the expenses are eligible, appropriate documentation confirms that the adoption has been finalized, etc.), the reimbursement request will be processed through the payroll system and the reimbursement amount will be added to the faculty or staff member’s pay check. The Quality of Worklife Office will begin reviewing reimbursement requests as of July 1, 2009, when this policy goes into effect.
413.8 Possible Tax Implications
The federal tax laws addressing adoption assistance plans are found in section 137 of the Internal Revenue Code of 1986, as amended, and the regulations thereunder. These benefits may be exempt from federal income taxes, and the University will not withhold federal income taxes. However, tax exemption may not be available (or may be less than expected) for faculty or staff members with personal or joint income levels above certain dollar amounts. In addition, federal law provides a tax credit for adoption expenses that are not reimbursed by an employer or paid under a state or federal grant program. Because individuals must elect between the tax credit and reimbursement under this Plan for the same expenses, and because for some taxpayers, the credit might produce a lower overall tax liability, we recommend that employees seek tax advice from an accountant or lawyer regarding this benefit.
Benefits under the Plan are not exempt from FICA, state or city taxes.
413.9 More Information
The Plan is administered by the Quality of Worklife Office in Penn’s Division of Human Resources. For additional information about the Plan, please call (215) 573-2471 or send an e-mail to email@example.com.
Applicability: All active full-time faculty with a benefits eligible title, active regular full-time staff and regular staff in limited service positions.
Cross-reference: Policy 115, Policy 412, Policy 616, Policy 631.