Can FSA Be Used for Fertility Treatments?

A Flexible Spending Account (FSA) offers a valuable way to pay for healthcare costs with pre-tax dollars. This employer-sponsored benefit allows individuals to set aside a portion of their income before taxes are withheld, creating a designated fund for eligible medical, dental, and vision expenses. Understanding the scope of eligible expenses, particularly for specialized treatments like fertility care, is important for maximizing the benefits of an FSA.

FSA Eligibility for Fertility Treatments

Fertility treatments are generally considered eligible expenses for an FSA, provided they meet the Internal Revenue Service (IRS) definition of “medical expenses.” The IRS outlines medical expenses as costs incurred for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body. Fertility treatments, when medically necessary to address an inability to have children, typically align with this definition.

The criteria for an expense to be considered medically necessary in the context of FSA eligibility centers on its direct relationship to a diagnosed medical condition. This means the treatment must be intended to alleviate or prevent a physical or mental illness. Expenses that are merely beneficial to general health, rather than addressing a specific medical issue, do not qualify.

Eligible Fertility Expenses

Many specific types of fertility-related expenses are typically covered by an FSA, encompassing a range of services, procedures, and medications. In vitro fertilization (IVF) and intrauterine insemination (IUI) are prominent examples of eligible procedures. These procedures, along with gamete intrafallopian transfer (GIFT) and other assisted reproductive technologies (ART), are also covered.

Fertility medications, such as hormone injections prescribed to enhance fertility, are also eligible expenses. Diagnostic tests play a significant role in fertility treatment and are commonly covered by FSAs. This includes fertility evaluations, blood work, ultrasounds, ovulation tests, and pregnancy tests.

Consultations with fertility specialists and various laboratory fees directly associated with fertility treatment are also eligible for reimbursement. The temporary storage of eggs, embryos, or sperm, when part of an active treatment cycle, is typically covered. Surgical procedures, including those performed to reverse prior surgeries that prevented reproduction, can also be reimbursed through an FSA.

Egg donor fees may qualify if they are deemed medically necessary by a physician and are preparatory to a procedure performed on the FSA participant or their spouse. Travel expenses incurred primarily for medical care, such as transportation to and from appointments, can be eligible. This includes:
Bus, taxi, train, plane fares.
Mileage reimbursement at a set rate.
Lodging expenses up to $100 per night if staying away from home primarily for medical treatment.

Ineligible Fertility Expenses

Certain fertility-related expenses are not covered by an FSA. A significant exclusion involves surrogacy-related costs, as payments to a surrogate mother, legal fees associated with surrogacy, and the surrogate’s medical expenses are typically not eligible. This is because FSAs primarily cover expenses for the account holder, their spouse, or qualified dependents, and a surrogate generally does not fall into these categories.

Long-term storage fees for eggs, embryos, or sperm that are not part of an active treatment cycle are also usually ineligible. Expenses for elective procedures not considered medically necessary for fertility treatment do not qualify for reimbursement. This distinction emphasizes that the treatment must address a diagnosed medical condition rather than being for general wellness or cosmetic purposes.

Non-medical aspects of fertility treatment are not covered, such as:
General travel expenses not directly related to medical care.
Auto insurance.
Vehicle maintenance.
Traffic tickets.
Genetic testing of embryos conducted for non-medical reasons, rather than for diagnostic or treatment purposes related to infertility, is typically excluded from FSA eligibility.

Claiming Fertility Expenses with Your FSA

Utilizing your FSA for fertility expenses requires meticulous record-keeping and proper documentation. It is important to obtain and retain itemized receipts for all services, procedures, and medications. If your medical care involves insurance, an Explanation of Benefits (EOB) from your insurance carrier is also a crucial document, detailing what your insurance covered and your remaining out-of-pocket responsibility. These documents should clearly state the date of service, type of service, charged amount, and the name of the provider.

For certain treatments or services that may not have an obvious medical purpose, a Letter of Medical Necessity (LMN) from your physician or another licensed medical practitioner may be required. An LMN serves as certification that a specific product or service is medically necessary to treat a diagnosed condition. The letter should outline:
The specific medical condition being treated.
A detailed description of the recommended treatment, including frequency or dosage.
The duration for which the expense will be needed to address the condition.

Once you have the necessary documentation, you can submit claims to your FSA administrator. Most administrators offer convenient methods for submission, including online portals, mobile applications, or mail. When submitting a claim, you will typically need to provide the date of service, the provider’s name, a description of the service, and the amount paid. Claims are usually processed within one to five business days, with reimbursement often deposited directly into your bank account.

A significant aspect of FSAs is the “use-it-or-lose-it” rule, which dictates that funds not used by the end of the plan year are generally forfeited. However, employers may offer a grace period, usually up to two and a half months, to use remaining funds, or allow a limited amount to be rolled over to the next plan year. For example, for the 2025 plan year, up to $660 may be rolled over. The maximum amount an employee can contribute to an FSA for 2025 is $3,300, which is important to consider when planning for substantial fertility treatment costs.