Can You Use an HSA for Egg Freezing?

Healthcare planning involves managing various medical expenses. Understanding available financial tools, such as Health Savings Accounts (HSAs), is crucial for preparing for diverse healthcare needs. This article explores how HSAs can be used for egg freezing expenses.

Understanding HSA Eligibility

A Health Savings Account (HSA) is a tax-advantaged savings account designed to help individuals pay for current and future medical expenses. HSAs boast a “triple tax advantage”: contributions are tax-deductible or made pre-tax, the funds grow tax-free, and withdrawals are tax-free when used for qualified medical expenses.

To be eligible to open and contribute to an HSA, an individual must be covered under a High Deductible Health Plan (HDHP). Other requirements include not having other health coverage, not being enrolled in Medicare, and not being claimed as a dependent on someone else’s tax return.

For 2025, an HDHP is defined by specific Internal Revenue Service (IRS) thresholds. The plan must have an annual deductible of at least $1,650 for self-only coverage or $3,300 for family coverage. The annual out-of-pocket expenses, including deductibles and co-payments but not premiums, cannot exceed $8,300 for self-only coverage or $16,600 for family coverage. Individuals with self-only HDHP coverage can contribute up to $4,300 to their HSA, while those with family coverage can contribute up to $8,550. Individuals age 55 and older are permitted an additional “catch-up” contribution of $1,000 per year.

The IRS defines qualified medical expenses as costs for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any part or function of the body.

Determining Egg Freezing Expense Qualification

Whether egg freezing expenses qualify for HSA funds depends on the underlying reason for the procedure. Elective egg freezing, performed for future family planning without a diagnosed medical condition, typically does not qualify as a medical expense. The IRS guidelines focus on medical necessity, requiring the expense to alleviate or prevent a physical or mental illness or defect.

However, egg freezing can qualify as an HSA-eligible expense when medically necessary. This includes situations where a diagnosed medical condition, such as impending medical treatment like chemotherapy, could impair fertility. Infertility is recognized as a medical condition by the IRS, making fertility preservation due to it also eligible.

For medically necessary cases, several components of the egg freezing process may qualify. Initial consultations with fertility specialists are generally eligible if they relate to a specific medical condition or concern. Diagnostic tests, such as hormone profiles, ultrasounds, and semen analyses, which are crucial for diagnosing infertility issues, also qualify.

Prescribed hormone medications and the egg retrieval procedure itself, including associated anesthesia, can be covered. Other fertility treatments like in vitro fertilization (IVF) are also typically eligible if performed on the account holder, spouse, or eligible dependent.

Long-term storage fees for frozen eggs are generally not eligible for HSA reimbursement. Only short-term storage, typically limited to 12 months, may qualify if it is part of a medically necessary reproduction plan and intended for immediate use. To substantiate medical necessity for storage, a Letter of Medical Necessity (LMN) from a medical professional is required. This letter must detail the medical problem, how storage will address it, and the necessary duration of storage.

The IRS has not issued definitive guidance specifically on elective egg freezing, leaving some ambiguity. It is advisable to consult with a tax professional to determine eligibility based on individual circumstances. Proper medical documentation supporting the necessity of the procedure is crucial for any claim.

Steps to Use Your HSA

Once it is determined that a medical expense qualifies for HSA eligibility, there are practical steps to utilize the funds. One common method is to use an HSA debit card, which functions similarly to a regular debit card at healthcare providers, pharmacies, or online. Many HSA providers also offer online payment options, allowing direct payments to medical providers through a secure portal. Some accounts may even provide checkbooks for direct payments.

Another flexible approach is to pay for qualified medical expenses out-of-pocket and then reimburse oneself from the HSA later. There is no time limit for reimbursement, provided the HSA was established before the expense was incurred. This allows individuals to let their HSA funds grow or invest them, reimbursing themselves when needed, even years or decades later. The reimbursement process typically involves logging into the HSA account, entering the expense details (amount, date, description), and selecting a reimbursement method, such as an electronic transfer to a linked bank account or a check.

Meticulous record-keeping is crucial when using HSA funds, especially for reimbursements. Individuals should retain all receipts, invoices, and Explanation of Benefits (EOBs) from their health insurance provider. For procedures requiring medical necessity, such as certain egg freezing expenses, any supporting medical documentation, like a Letter of Medical Necessity, should also be kept.

These records serve as proof of qualified expenses in case of an IRS audit. Without proper documentation, non-qualified withdrawals can be subject to income tax and a 20% penalty if the account holder is under age 65. It is recommended to keep these records for at least seven years, corresponding to the typical audit period for tax returns.