While egg freezing has grown in popularity — with a 46% increase in egg freezing cycles from 2020 to 2021 alone! — it has also increased in cost. As a result, one question that often arises is whether existing healthcare financial structures, such as Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs), can be used to cover these expenses. In this article, we delve into the complex and nuanced world of HSAs and FSAs, particularly as they relate to egg freezing.
How HSAs and FSAs work
An HSA is a tax-advantaged medical savings account available to individuals enrolled in a High-Deductible Health Plan (HDHP). An FSA, on the other hand, is an employer-sponsored benefit that allows employees to contribute pre-tax dollars to pay for eligible healthcare expenses.
A key characteristic of HSAs and FSAs is their ability to be used for “qualified medical expenses,” which are broadly defined by the Internal Revenue Service (IRS). These expenses include costs associated with diagnosis, cure, mitigation, treatment, or prevention of disease, as well as treatments affecting any part or function of the body. Importantly, the funds can be used for expenses that are not covered by your health insurance plan, including deductibles, co-payments, and other non-covered expenses.
Is egg freezing a qualified medical expense?
The issue arises when we attempt to categorize egg freezing under these “qualified medical expenses.” As of the writing of the article, the IRS does not specifically list egg freezing as an eligible expense. However, they also do not explicitly exclude it.
In their guidance, the IRS states that the primary purpose of the expense must be to alleviate or prevent a physical or mental defect or illness. Therefore, if egg freezing is done for a medical reason, such as preserving fertility before undergoing chemotherapy, it may be possible to argue that it falls under “qualified medical expenses.” But when the procedure is carried out for non-medical reasons, such as lifestyle or career choices, it’s a gray area.
The IRS list is not all-inclusive, and medical eligibility is often subject to interpretation and specific circumstances. So if you’re hoping to use an HSA or FSA for egg freezing, you will definitely want to consult with a tax professional or an accountant to gain a comprehensive understanding of your unique situation.
All of the expenses associated with egg freezing, and if they qualify
Egg freezing encompasses a range of expenses, each contributing to the overall cost. We break them down here as it’s possible that some - even if not all - may qualify in the eyes of the IRS.
This usually involves an appointment with a fertility doctor to assess your health, discuss the egg freezing process, and possibly begin preliminary testing. As this is a medical consultation, it may fall under "qualified medical expenses" if it’s related to a specific medical condition or concern.
Birth control may be prescribed for the weeks leading up to your cycle to give your care team more control over the timing of your egg freezing procedure, help your ovaries better respond to fertility drugs, and minimize the growth of cysts. Prescription birth control generally counts as an eligible medical expense unless otherwise restricted by your employer's plan documents.
Ovarian stimulation medications
Prior to the egg retrieval procedure, you are given hormonal medications to stimulate the ovaries to produce multiple eggs. The IRS states that you can include the amount you paid for “prescribed medicines and drugs,” thus these medications may qualify.
Monitoring and lab work
During the egg freezing cycle, you will have multiple visits to monitor your hormones and follicle development. The categorization of the lab work and monitoring may depend on the specific medical circumstances surrounding the egg freezing cycle.
Egg retrieval procedure
The egg retrieval procedure often involves the use of sedation or anesthesia. The retrieval and the associated anesthesia may be categorized as a medical expense, but it’s again contingent upon the specific circumstances.
The process of actually freezing the eggs and then storing them at sub-zero temperatures requires a significant amount of resources and technology. As of the current regulations, this is the expense that is least likely to be categorized as a “qualified medical expense.” The primary reason being that the IRS stipulates that healthcare storage (like cord blood banking) is only considered a qualified expense if it's reasonable to believe the stored material will be used to treat a pre-existing or imminent medical condition.
If you qualify for our Split program, where you can freeze your eggs for free when you donate half to another family who can’t conceive (think: LGBTQ+ parents, those with infertility, and more), your cycle coverage includes up to 10 years of frozen egg storage!
Future thawing, fertilization, and embryo transfer
These procedures occur if and when you decide to use your frozen eggs to attempt pregnancy. They involve further medical procedures and medications, which, under most circumstances, can be considered "qualified medical expenses."
Travel and transportation
Depending on the proximity of the clinic, travel and transportation costs may be a significant part of the overall expenses. However, the IRS typically does not include travel costs for non-emergency medical procedures as qualified expenses. Each case might be different, so consultation with a tax professional is advisable.
In some cases, women may be advised to take certain dietary supplements during the process to boost their overall health or egg quality. The IRS includes supplements as a qualified medical expense if they are used as “treatment for a specific medical condition diagnosed by a physician” A Letter of Medical Necessity (LMN) could potentially justify their use as part of a broader treatment plan.
Despite the potential categorization of several of these procedures as qualified expenses, it's important to note that the overarching reason for the egg freezing process may influence whether these expenses are considered “qualified” by the IRS. This interpretation varies widely, so consultation with a tax professional or legal advisor is strongly recommended to understand your individual situation.
Getting a Letter of Medical Necessity (LMN)
A Letter of Medical Necessity (LMN) plays a critical role when seeking reimbursement for medical procedures under consumer-directed healthcare accounts, including HSAs and FSAs. When it comes to egg freezing, this letter becomes an essential component to validate the procedure's medical necessity.
The LMN must be issued by a healthcare provider, often your treating physician, outlining the following crucial elements:
- Connection to medical condition: The LMN should detail the specific medical condition that necessitates egg freezing. This might include conditions like endometriosis, polycystic ovary syndrome (PCOS), or pre-chemotherapy fertility preservation, among others.
- Treatment plan: The letter should include information on how the egg freezing will help alleviate or address the identified medical issue. It may outline the plan for potential usage of the stored eggs in future fertility treatments.
- Duration of storage: The LMN should also provide an estimation of how long the eggs need to be stored. Importantly, IRS guidelines stipulate that only short-term storage, up to 12 months, may be considered a "qualified medical expense." Storage fees that exceed this time frame may not be eligible for reimbursement under current regulations.
Egg freezing and storage for potential future use without a defined medical necessity is typically not considered eligible for reimbursement. The IRS guidelines center around the concept of medical necessity, which is why the LMN is such a crucial part of this process.
Other ways to pay for egg freezing
If you’re interested in egg freezing but learn that you cannot use your HSA or FSA funds, there are other financial avenues to explore.
Various insurance providers and employers are starting to cover egg freezing and other fertility preservation methods. Progressive companies such as Google, Apple, and Facebook have already started offering egg freezing coverage as part of their benefits package. That said, we have a long way to go before egg freezing is offered as a commonplace employer benefit, which is why our accessible egg freezing programs are helpful to so many.
Read more in What Employers Offer Egg Freezing Benefits?
Unfortunately, very few insurance plans today cover the full cost of egg freezing, unless it is medically necessary. For example, if you have a medical condition that may impact your fertility, such as cancer, your insurance may cover the cost of egg freezing as part of your cancer treatment. Check with your insurance provider to see if they cover egg freezing and what the requirements are.
Read more in Does Insurance Cover Egg Freezing?
Cofertility’s Split program
At Cofertility, our Split program allows you to freeze and store your eggs *entirely for free* for 10 years, when you give half to a family who can't otherwise conceive.
To see if you qualify, take our quiz and tell us a bit about yourself. This only takes about a minute and gives a sense of what programs you might be qualified for.
There are a growing number of financing options, such as loans or payment plans like Sunfish, to help patients pay for egg freezing. These options allow you to spread the cost of the procedure over several months, making it more manageable.
Our take: IRS should rethink its stance on elective egg freezing
As healthcare technology and societal norms evolve, there is potential for the IRS regulations to adapt and become more encompassing. Advocacy in this regard is crucial. For instance, RESOLVE: The National Infertility Association and the American Society for Reproductive Medicine (ASRM) are two organizations that have been pushing for more comprehensive coverage of infertility treatments, including egg freezing.
Summing it up
Using HSA or FSA funds for egg freezing is a nuanced and complex issue, largely dependent on individual circumstances and interpretations of IRS guidelines. While it may be possible under specific medical circumstances, women considering egg freezing for non-medical reasons may face more significant challenges in utilizing these funds.
As we navigate this evolving landscape, and encourage the expansion of “qualified medical expenses,” you’ll want to seek professional tax advice, and explore other financial avenues towards making egg freezing more accessible. Through our collective voices and efforts, we can work towards making fertility preservation a widely recognized and supported aspect of women's healthcare.
Freeze your eggs with Cofertility
We’d love the opportunity to support you on your egg freezing journey.
Through our Split program, qualified freezers can freeze their eggs for free when donating half of the eggs retrieved to a family who can’t otherwise conceive.
Through our Keep program — where you keep 100% of eggs retrieved for your own future use — we offer exclusive discounts on expenses, such as frozen egg storage. Keep members also still gain free access to our Freeze by Co Community, a safe space for those engaging in the egg freezing process (or gearing up for it) to connect and lean on each other.
By making egg freezing easier and more accessible, our programs further strengthen the American Society of Reproductive Medicine (ASRM)’s Committee Opinion that egg freezing can help promote social justice and strengthen gender equality.