Are surrogate mother fees reimbursable under an HRA?
Issue:

Your company has a health reimbursement arrangement (HRA). Can a surrogate mother’s fees be reimbursed under your plan, and does it matter if the employee is the surrogate mother or the child's eventual parent? What about fees paid directly to an agency that searches for a surrogate on behalf of the employee?
Answer:    

The answer depends on whether the employee is the surrogate:

  • If the employee is the surrogate mother, her expenses would be reimbursable. Under an HRA, or any other group health plan such as a Code Sec. 125 flexible spending account (FSA), a plan participant who becomes a surrogate mother may submit for reimbursement any qualified medical expenses that she incurred as a surrogate that were not otherwise covered.
  • If the employee is not the surrogate mother, her expenses will not be reimbursable. If she will, instead, become the child's eventual mother, the medical expenses incurred by the surrogate mother will not be considered eligible expenses, and the employee may not claim them from her HRA.

Also, any fees paid to an agency to search for a surrogate mother on the employee's behalf would not be considered medical expenses eligible for reimbursement.

Source: CCH Employee Benefits Management ¶39,065.
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