Board asks staff to explore surrogacy and adoption benefits after Aon briefing
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Summary
Following an Aon Hewitt education session, the board voted to direct staff to explore benefit-design options for both surrogacy and adoption, with attention to legal, tax and cost implications and a follow-up recommendation to be returned to the board.
The Health Service System board voted to instruct staff to explore plan designs for surrogacy and adoption benefits after Aon Hewitt provided an educational briefing on both topics.
Aon explained that surrogacy coverage is uncommon among employers (Aon estimated fewer than 5% of employers offer it) and can involve substantial one-time costs; typical employer designs cited a lifetime-maximum approach ranging from about $10,000 to $30,000, though total carried costs for full-service surrogacy can be far higher. Aon also noted legal and tax constraints: surrogacy payouts generally are not payable from the trust under current IRS rules and may be subject to taxation and benefits-design restrictions. "From an employer standpoint... I'd say under 5% of employers" offer surrogacy, Aon said.
The board heard public comments from retired-members' representatives urging careful analysis of member impacts; Claire Zvonski, representing retired employees, urged that "more information is better" to protect vulnerable members. Several commissioners favored exploring adoption assistance as a more common and tax-advantaged option; others supported looking at both to evaluate costs and feasibility.
After discussion, the board moved and seconded instructions to HSS staff to develop recommendations around benefit designs for surrogacy and adoption and to return with proposals. The motion passed by voice vote.
Next steps: Staff will consult with Human Resources and legal counsel, gather market data and cost estimates, and return to the board with options and recommended plan designs for further consideration.
