The Code of Laws of the United States defines Assisted Reproductive Technology (ART) as “all treatments or procedures which include the handling of human oocytes [eggs] or embryos”. For many individuals and couples with fertility struggles, ART has made biological parenthood possible. According to data from the Centers for Disease Control and Prevention, fertility treatments are on the rise with 284,385 ART cycles performed in the U.S. in 2017, and approximately 1.7% of all live births in the U.S. involve ART. The most common ART procedure is IVF; other procedures include Gamete Intrafallopian Transfer (GIFT), Zygote Intrafallopian Transfer (ZIFT), Intracytoplasmic Sperm Injection (ICSI), and Artificial Insemination.
As ART enables exciting new family opportunities, though, it also presents a number of financial and legal issues. For many, the extremely high costs and limited coverage by insurance companies create a high barrier to access ART procedures, forcing many to pay for treatments out of pocket, which have given rise to the proposal of several pieces of legislation in an effort to help make ART more accessible through insurance coverage. However, despite legislative efforts to expand insurance coverage for ART procedures, there is still no Federal requirement for insurers to provide ART coverage to policyholders. In turn, though, the lack of Federal laws requiring insurers to provide ART coverage has led thirteen states to pass their own “mandate-to-cover” laws (AK, CT, DE, HI, IL, MD, MA, MT, NJ, NY, OH, RI, and WV), and three have passed “mandate-to-offer” laws (CA, TX, LA) for residents and workers in those states. “Mandate-to-cover” laws require that some or all insurance plans have to cover certain fertility treatments, and “Mandate-to-offer” laws require that insurance providers offer certain testing and treatment services (although employers can decide which of those benefits, if any, to offer those covered by their plans). Some of these “mandate” states also carry certain exemptions for costs related to surrogacy, religious employers, and restrictions for same-sex couples.
Financial advisors can offer great value to their clients by reviewing their current health insurance policies and helping them understand whether their coverage includes fertility treatments, especially for individuals and couples living in non-mandate states. Some individuals may have access to coverage for ART procedures through employer-based group coverage, benefits available to government workers or military servicemembers, or public benefits like Medicare. Some employees who reside in non-mandate states, but who have employers with main offices in mandate states, may be able to benefit from the mandate-state policies as well.
A growing number of technology companies like Google, Facebook, and Spotify are also adding ART processes, such as egg freezing and IVF cycles, to their employee benefits packages. Advisors may want to encourage their clients to explore risk-sharing programs, scholarships and grants, and even traveling abroad where fertility treatments are offered at significantly lower cost (at least relative to the pricing of such services in the US).
The costs of ART procedures may also be mitigated by leveraging the tax code. The IRS considers “fertility enhancements” that help the taxpayer “overcome an inability to have children” as deductible medical expenses that can be claimed as itemized deductions (if the usual key thresholds for itemizing medical expense deductions are met). These deduction-eligible fertility enhancements include “procedures such as in vitro fertilization” and “surgery, including an operation to reverse prior surgery that prevented the person operated on from having children.”
Access to employer-provided tax-preferenced savings accounts, such as Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs), may provide additional tax-saving opportunities. A one-time IRA rollover to an HSA, called a Qualified HSA Funding Distribution (QHFD), can also be used to help fund expenses if income or liquidity is low.
Ultimately, the key point is that the cost of ART procedures can be unpredictable and potentially very expensive. While managing the costs of ART may take some creativity, advisors can help their clients successfully navigate the legal and financial complexities to minimize the emotional and financial burdens often experienced by those pursuing fertility treatments.