Can You Use Your FSA for Egg Freezing?

Flexible Spending Accounts (FSAs) offer a tax-advantaged way to save for various healthcare expenses. Procedures like egg freezing have gained attention, raising questions about their eligibility for FSA reimbursement. This article explores how FSAs operate and the specific conditions under which egg freezing may qualify as an eligible medical expense.

Understanding Flexible Spending Accounts

A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows individuals to set aside pre-tax money from their paycheck to pay for eligible healthcare costs. This arrangement reduces an employee’s taxable income, leading to tax savings. Employers may also contribute to an FSA, though this is not mandatory.

FSAs operate on a “use-it-or-lose-it” principle, meaning funds not spent by the end of the plan year are typically forfeited. However, employers can offer flexibility, such as a grace period of up to two and a half months or allowing a carryover of up to $640 into the next plan year. The Internal Revenue Service (IRS) broadly defines “qualified medical expenses” as costs incurred for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body. These eligible expenses can include deductibles, copayments, prescription medications, and medical equipment.

Determining Egg Freezing Eligibility

For egg freezing to be considered an eligible expense for FSA reimbursement, it must be deemed medically necessary rather than a purely elective procedure. IRS guidelines focus on expenses related to the diagnosis, cure, mitigation, treatment, or prevention of a medical condition. Therefore, if egg freezing is performed due to a diagnosed medical issue, it may qualify.

Examples of medical necessity include conditions that impact fertility, such as endometriosis, polycystic ovary syndrome (PCOS), or fertility preservation before medical treatments like chemotherapy or radiation that could cause infertility. In such cases, the procedure is seen as preventing or mitigating a physical defect or illness. Conversely, egg freezing undertaken solely for elective reasons, such as lifestyle choices or age-related fertility decline without a specific medical diagnosis, falls outside the scope of eligible expenses. While the IRS does not specifically list egg freezing as an eligible expense, it also does not explicitly exclude it, making medical necessity a central factor for eligibility. Temporary storage of eggs, sperm, or embryos may also be FSA-eligible if part of an active treatment cycle and medically necessary, though storage fees cannot exceed 12 months for reimbursement.

Required Documentation for Reimbursement

To substantiate egg freezing expenses for FSA reimbursement, specific documentation is necessary. The primary document required is an itemized receipt from the fertility clinic or healthcare provider. This receipt must clearly detail the services rendered, the date the services were provided, the patient’s name, a description of the service, and the total cost incurred.

A Letter of Medical Necessity (LMN) from a qualified healthcare professional, such as your physician, is another crucial piece of documentation. This letter must explicitly state the medical diagnosis that necessitates the egg freezing procedure. The LMN should include the patient’s name, the medical diagnosis code, a detailed description of the services, and a clear medical justification for why egg freezing is required to alleviate or address the identified medical issue. If any portion of the procedure was submitted to health insurance, an Explanation of Benefits (EOB) from the insurer is also required to demonstrate the actual out-of-pocket expense after insurance payments or denials.

Submitting Your FSA Claim

Once all necessary documentation has been gathered, the next step involves submitting your FSA claim for reimbursement. Most FSA administrators offer several convenient methods for claim submission, including online portals, mobile applications, mail, or fax. The process involves completing a claim form provided by your FSA plan, where you will enter details of the expense.

After filling out the form, attach the supporting documentation, such as itemized receipts, the Letter of Medical Necessity, and any Explanation of Benefits. It is advisable to retain copies of all submitted documents for your personal records. Upon submission, FSA administrators will process the claim, which takes a period ranging from a few days to a couple of weeks. Reimbursement is issued via direct deposit or check, depending on your account setup. Be prepared for potential follow-up requests from the FSA administrator for additional information to verify the claim’s eligibility.