Does FSA Cover Fertility Treatments?

A Flexible Spending Account (FSA) offers a valuable way to pay for healthcare expenses with pre-tax dollars. These employer-sponsored accounts allow individuals to set aside a portion of their income, which can then be used for qualified medical costs. Many fertility treatments are considered eligible expenses under an FSA, providing financial relief for individuals and couples pursuing family-building options. This guide aims to clarify which specific fertility-related costs can be covered, what typically falls outside the scope of coverage, and the process for effectively utilizing an FSA for these significant expenses.

Eligible Fertility Expenses

Flexible Spending Accounts generally cover a broad range of fertility treatments and related services. In-Vitro Fertilization (IVF) is an eligible expense, including the temporary storage of eggs, sperm, or embryos. This also extends to procedures like Gamete Intrafallopian Transfer (GIFT) and Intrauterine Insemination (IUI), which are common assisted reproductive technologies.

Diagnostic tests play a significant role in fertility treatment and are typically FSA-eligible. This includes various blood tests, ultrasounds, semen analyses, and ovulation tests, which help identify underlying issues or monitor treatment progress. Consultations with reproductive endocrinologists and other fertility specialists are also covered, as these visits are integral to diagnosis and treatment planning. Many prescribed fertility medications, such as hormones designed to stimulate egg production, qualify for reimbursement.

Surgical procedures aimed at addressing fertility issues, including operations to reverse prior surgeries that prevent conception, are eligible expenses. Temporary storage of eggs, embryos, or sperm for future use in fertility treatments is generally covered, allowing individuals to preserve their reproductive material for medical necessity. Acupuncture and counseling costs directly related to fertility treatment are also often eligible.

Ineligible Fertility Expenses

While FSAs cover many fertility-related costs, certain expenses are typically not eligible for reimbursement because they do not meet the IRS definition of qualified medical care for the FSA holder or their dependents. Compensation paid to egg or sperm donors is a primary example. While medical expenses incurred by the donor directly related to the donation process for the FSA holder might be eligible, the compensation fee itself is not.

Similarly, fees paid to surrogates are generally not covered by an FSA. This includes payments for identifying, retaining, or compensating a gestational surrogate, as well as the surrogate’s medical care, as these expenses are considered to be for an unrelated party. Long-term storage of eggs or embryos, usually exceeding one year, may not be eligible, as FSAs are primarily for immediate medical needs and typically operate on an annual basis. Elective cosmetic procedures or non-medical travel and lodging expenses associated with treatment are also ineligible. Expenses for general health improvement, such as vitamins or supplements not prescribed by a medical practitioner for a specific condition, are typically not covered.

Using Your FSA for Fertility Treatments

Utilizing your FSA funds for eligible fertility treatments involves specific administrative steps, ensuring compliance with IRS regulations. The most common methods for accessing your FSA funds are using an FSA debit card at the point of service or submitting claims for reimbursement. An FSA debit card, often provided by your plan administrator, allows for direct payment for eligible expenses at healthcare providers or pharmacies. Even when using a debit card, it is crucial to keep all itemized receipts, as substantiation may be required.

For expenses paid out-of-pocket, you will need to submit a claim for reimbursement. This process typically requires specific documentation to verify eligibility. Essential documents include itemized receipts from the healthcare provider, which must clearly show the date of service, the type of service provided, the provider’s name, and the amount charged. If you have health insurance, an Explanation of Benefits (EOB) from your insurance provider is also a necessary document, detailing what your insurance covered and your out-of-pocket responsibility. In some cases, a Letter of Medical Necessity (LMN) from your doctor may be required, particularly for less common treatments or specific medications.

Claims can usually be submitted through an online portal, via mail, or by fax, depending on your FSA administrator’s process. Processing times for claims can vary but generally range from a few business days to a week. It is important to submit claims promptly, as most FSA plans have a “run-out” period, which is a deadline after the plan year ends by which all claims for the previous year’s expenses must be submitted.

Special Considerations for Fertility Treatment Coverage

The eligibility of fertility treatments for FSA coverage often hinges on the concept of “medical necessity.” The IRS generally considers expenses for the diagnosis, cure, mitigation, treatment, or prevention of disease to be qualified medical expenses. For fertility treatments, this means a medical diagnosis or recommendation from a healthcare professional is typically required to establish that the treatment addresses a medical condition. IRS Publication 502, which outlines deductible medical and dental expenses, serves as the foundational guidance for what constitutes a qualified medical expense for FSA purposes.

Managing expenses for treatments that span across multiple FSA plan years requires careful planning. FSAs traditionally operate under a “use-it-or-lose-it” rule, meaning funds not used by the end of the plan year are forfeited. However, many employers offer either a grace period, typically an extra 2.5 months into the new plan year to use remaining funds, or a rollover provision, allowing a limited amount (e.g., up to $610 for 2024) to carry over to the next year. Employers can offer one of these options, but not both.

An FSA can cover fertility treatments for the account holder, their spouse, or eligible dependents. This includes children who meet the IRS definition of a dependent. While IRS rules establish the general framework, specific FSA plan administrators may have unique documentation requirements or submission procedures, making it advisable to consult with them directly.