Universal Music Group provides an Adoption Assistance Program to support employees who are building families. It is intended that the policy meet the requirements for an “adoption assistance program” set forth in Section 137 of the Internal Revenue Code (the “Code”) and that benefits paid to each employee under the policy be excludable from the employee’s gross income to the maximum extent allowable.

Eligibility

Regular, full-time, benefits eligible employees are eligible for adoption assistance benefits.

If an eligible employee and his/her eligible spouse both work at UMG, only one employee may submit reimbursement for “qualifying adoption expenses” (defined below).

Policy

Eligible employees can request financial reimbursement of qualifying adoption expenses up to the limits imposed by this policy.

• Eligible Children: To qualify under this benefit, adopted children must be under the age of 18 when the expenses are incurred and may not be related to either parent. Kinship adoptions and stepchild adoptions do not qualify under this benefit.
• Financial Reimbursement: Universal Music Group will reimburse eligible employees up to a lifetime maximum benefit of $14,000 per employee for qualifying adoption expenses.
• Qualifying Adoption Expenses: Qualifying adoption expenses means reasonable and necessary adoption fees, court costs, attorney fees, and other expenses that are: (i) directly related to the legal adoption of an eligible child; (ii) not incurred in violation of any state or federal law, or in carrying out any surrogate parenting arrangement; (iii) not for the adoption of the employee’s spouse’s child(ren); and (iv) not reimbursed by any other source. In addition, for purposes of this policy, an expense will not be considered a qualifying adoption expense unless it is incurred after January 1, 2020.

Eligible Expenses

Eligible Expenses are reasonable and necessary adoption expenses that are directly related to the legal adoption of an eligible child. Examples of qualifying adoption expenses include the following:

• State-licensed adoption agency fees for placement and parental counseling;
• Foreign adoption expenses and re-adoption charges in the US related to a foreign adoption;
• Legal costs, including attorney’s fees and costs of legal proceedings;
• State-required “pre-placement home study” and “post-placement supervision” programs, if applicable;
• Medical expenses of the natural mother associated with the actual childbirth (provided, however, that expenses for carrying out surrogate parenting arrangements are excluded from reimbursement);
• Charges for temporary foster care before placement provided by a licensed agency;
• Reasonable and customary transportation and lodging expenses to obtain physical custody of the adopted child. Expenses may be for the adoptive parents, child and natural mother.

Ineligible Expenses

Ineligible expenses include, but are not limited to:

• Voluntary donations to an adoption agency
• Expenses related to a non-eligible child, a child of the eligible employee’s spouse or domestic partner, stepchild, legal guardianship, or surrogate parenting
• Expenses that are reimbursed under another plan, including federal, state, and local programs or are in violation of federal or state law
• Expenses for which the participant has also claimed an income tax exclusion or credit.
• Expenses not paid in US dollars
• All expenses submitted for reimbursement are subject to review by the policy administrator at any time.

Documentation Requirements

To be eligible for reimbursement, employees must provide required supporting documentation, which includes but is not limited to:

• Copy of the adoption certificate;
• Photocopies of expense substantiation (DO NOT send original receipts);
  • Substantiation must contain the following:
    • Provider Name
    • Date the services were incurred
    • Recipient of the service
    • Description of the service provided
    • Expense amount, showing amounts paid
    • Cancelled checks and credit card statements/receipts are not considered valid substantiation

Other supporting documentation may be required, if requested by the policy administrator.

How to be Reimbursed

Reimbursements may only be made once the adoption is final and the child has been placed in the employee’s home. Applications for reimbursement must be made within 180 days following the placement.

Please send a completed reimbursement form and copies of all qualifying adoption expenses to be considered for reimbursement to UMG Benefits at PeopleConnect.

Eligible reimbursements will be issued as soon as administratively possible after submission of a completed claim form and any required documentation, but no later than 60 days.

If an employee’s claim for reimbursement under this policy is denied, a claim review and appeals process is available. Please contact UMG Benefits to obtain a copy of the claim and appeals procedures.

Tax Considerations

Universal Music Group intends that qualified adoption expenses reimbursed under this policy be excludable from an employee’s gross income to the maximum extent allowable under applicable tax law, and therefore will not be subject to income tax withholding. However, these amounts are subject to Social Security, Medicare and federal unemployment taxes. Universal Music Group reserves the right to withhold such amounts as it deems necessary to comply with any applicable federal, state or local tax law or regulation.

Adoption expenses not reimbursed under this policy (nor reimbursed by another employer or policy) may be eligible for an IRS tax credit of up to $14,080 for 2019 (this amount is subject to change in future years). The rules relating to the taxation of adoption-related expenses are complex. As such, and because the amount, if any, of the exclusion or tax credit will depend on your own situation, we recommend that you consult with your own personal tax advisor on these provisions.

Tax Considerations

Benefits under this policy cannot discriminate in favor of highly compensated employees. Universal Music Group reserves the right to take such actions as it deems necessary or appropriate to prevent such prohibited discrimination.

Coordination with Other Benefits

At the time of placement, you may add your child to your health benefits by logging on to your account at www.umusicbenefits.com or by calling the Benefits Service Center at 888-526-2794. Any additions to your benefit plans must occur within 90 days of placement and coverage will be effective as of placement date.

Resources

• Adoption Assistance Guide
• Adoption Assistance Request Form