Most people in the US assume you can’t claim for infertility treatment using your Flexible Spending Account (FSA), but that’s not true. There are ways to do it, but you need to do your research.
Flexible Spending Accounts (FSAs) allow you to use some of your pay check to pay for healthcare expenses that are not covered by insurance. Most employers offer them. The money is set aside before tax so you save tax dollars (up to 30% or more) and use this to pay for bills for you, your spouse and eligible dependents. You must spend this money by having treatment during the ‘plan year’. If you don’t spend the funds in the year and by December 31st, you may lose it. You can put up to $2,550 into your FSA in any one year.
Can you expense IVF using FSA funds?
Every FSA is different and the rules on how they can be used can be complicated. It also depends on the state where you live. Talk to your Benefits Administrator at work to find out what is covered for you. The IRS says that an FSA can be used for treatments to overcome an inability to have children, IVF and surgery to treat infertility. Though testing isn’t on the IRS list of procedures, these expenses may be covered as “diagnostic services”.
How much can you save?
You could save hundreds of dollars on infertility treatment. An individual in the 30% tax bracket who contributes the maximum $2,550 will save $765 in taxes. It won’t be enough to pay for the full cost, but it can ease the burden. If you and your partner both have an FSA, you can use them both for expenses for infertility treatment, so the saving can be double! Because IVF is so expensive, it makes sense to maximize your funding to provide you with the most tax savings possible, but make sure you use it in time.
What about Health Savings Accounts (HSAs)?
A Health Savings Account (HSA) lets you keep your money from year to year and even invest it tax-free. But there’s a catch. They are only available to people on high-deductible health plans with individual deductibles of $1,300 or more (or family deductibles of $2,600 or more). Another drawback is that many employers do not offer them.
The end of the year is approaching fast, so don’t forget to use your FSA or HSA for treatment soon. Keep all your expense receipts safe and submit them before your deadline!