If you pay for IVF yourself, your health insurance choice still matters, even without coverage for artificial reproduction.
A High-Deductible Health Plan (HDHP) is an excellent choice because it lets you use a Health Savings Account (HSA) for uncovered costs.
An HSA reduces your federal taxes. High-income couples save more because tax rates rise with earnings.
Learn the pros and cons of HDHPs and HSAs. Find ways to reduce costs for IVF, pregnancy, and childbirth.
Self-Pay IVF With HSA
An HSA can be a great way to pay for IVF due to tax savings. But you need an HDHP to use an HSA.
In this section, we look at how an HSA can help with IVF costs.
1st Dollar Savings
The main benefit of using an HSA for IVF is the tax savings from the first dollar spent. Most patients save more with an HSA than deducting the same expenses from their taxes.
IVF costs are tax-deductible on Schedule A if you itemize. But only expenses over 7.5% of your Adjusted Gross Income (AGI) save you money.
HSA contributions immediately lower your taxable income without needing to meet the AGI threshold. If you contribute at work, you use pretax payroll deductions. You can use IRS form 8889 to deduct contributions if you have an account outside of work.
For example, a married couple with an AGI of $200,000 can use an HSA to save $3,300 more on a $15,000 IVF cycle.
| HSA | Schedule A | |
|---|---|---|
| 7.5% AGI | N/A | $15,000 |
| Deductible Expenses | $15,000 | $0 |
| Savings @ 22% | $3,300 | $0 |
No Need to Itemize
An HSA helps more self-pay patients because the savings are available even if you don’t itemize your taxes. Itemized deductions must exceed the standard deduction before any savings start.
The standard deductions for 2024 are as follows:
- Single or Married Filing Separately—$14,600
- Married Filing Jointly or Qualifying Surviving Spouse—$29,200.
- Head of Household—$21,900.
Itemized deductions include the following:
- Charitable Donations
- Mortgage Interest & PMI Premiums
- State & Local Property Taxes
- $10,000 limit if married
- $5,000 limit if single
- Casualty & Theft Losses
- Unreimbursed Medical & Dental Expenses above 7.5% of AGI
Renters are unlikely to itemize deductions since they don’t have mortgage interest, PMI, or property taxes. But, a married couple renting with an AGI of $200,000 still saves 22% on IVF costs using an HSA.
Contribution Limits
On the surface, HSA yearly contribution maximums limit their value when self-paying. The per-cycle cost of IVF ranges from $12,000 to $20,000, while the HSA annual contributions are much smaller currently.
- Self only: $4,150
- Family: $8,300
Fortunately, couples can overcome this limitation.
You can reimburse yourself with HSA funds for any IRS-qualified medical or dental expense in future years. You must keep an HDHP to make these catchup contributions.
High-Deductible Insurance & IVF
If you want to self-pay for IVF using an HSA for tax savings, you must enroll in an HDHP and keep it for several years.
A married couple can contribute $8,300 each year. The cost of IVF treatment determines how many years they need to stay in an HDHP.
- $16,600: two years
- $24,900: three years
- $33,200: four years
Since this is a long-term commitment, you should know how an HDHP works in four phases: IVF treatment, pregnancy, childbirth, and later years.
IVF Treatment
An HDHP follows the same rules for IVF treatment as other health plans. Its main benefit is the HSA, which offers significant tax savings for self-pay patients.
State insurance mandates usually decide if plans cover IVF, with some notable exceptions.
- Self-insured plans are exempt from mandates
- Mandates sometimes excuse small employers
- Mandates cover policies written in the state
- Twelve states have requirements to cover
- Two states have requirements to offer
Since most health plans don’t cover IVF, choosing an HDHP doesn’t matter during the treatment phase.
Pregnancy Timing
Patients using an HSA to self-pay for IVF should know how an HDHP affects them if treatment succeeds. Pregnant women often use more covered services, which can trigger the deductible and out-of-pocket maximum.
Pregnancy Deductible
The high deductible is a potential drawback of an HDHP during pregnancy. The IRS sets the minimum deductible at $1,600 for an individual. Policyholders must meet the deductible each plan year before benefits start.
The timing of pregnancy can require meeting the deductible once or twice, depending on when it begins and ends.
If the HDHP plan year starts on January 1:
- One deductible: A January conception ends by September of the same year.
- Two deductibles: A September conception ends in May of the next year.
Schedule your IVF cycles early in the plan year to avoid double deductibles.
Pregnancy Maximum
The smaller annual out-of-pocket maximum is a hidden benefit of an HDHP. The IRS sets an individual’s limit at $8,050 for an HDHP, while the Affordable Care Act allows up to $9,450 for other plans.
The annual out-of-pocket maximum covers unreimbursed medical care from in-network providers, including deductibles, coinsurance, and copayments.
Schedule your IVF cycles early in the plan year to benefit from the smaller annual maximum and avoid hitting the limit twice. Try to consolidate treatment, pregnancy, and childbirth expenses into one year.
Childbirth Experience
Patients using an HSA to self-pay for IVF should know the implications of an HDHP if multiple embryo transfers result in twins or triplets. Twins and triplets are more likely to be born preterm and need care in the Neonatal Intensive Care Unit (NICU).
Childbirth Deductible
The high deductible is a drawback of an HDHP during childbirth. The family must meet a second deductible if an infant needs NICU care.
Fortunately, IRS rules limit the family deductible to $3,200 or twice the individual deductible of $1,600. Mom’s labor and delivery charges usually trigger the first deductible, leaving one deductible for all NICU-confined infants, regardless of their number.
Couples can choose multiple embryo transfers during IVF, knowing they won’t face separate deductibles for each NICU-confined infant if they have twins or triplets.
Childbirth Maximum
The smaller annual out-of-pocket maximum is a huge benefit of an HDHP when twins or triplets need NICU care. Coinsurance and copayments add up two or three times faster.
The IRS sets a family limit of $16,100 for an HDHP, while the Affordable Care Act allows up to $18,400 for other plans. This $2,300 difference matters when multiple embryo transfers raise the chances of NICU care.
Buy hospital indemnity insurance before your next IVF cycle. If bought before conception, these policies pay a cash benefit to the parent for each NICU-confined infant.
Later Years
Patients using an HSA to self-pay for IVF often benefit from an HDHP years later when pregnancy and childbirth expenses end. An HDHP usually has lower premiums than plans with smaller deductibles.
The lower premiums make it easier to keep making HSA contributions. Keep records of all your IVF, pregnancy, and childbirth expenses and reimburse yourself with HSA funds to save on taxes.
While an HDHP might not cover IVF, it is an excellent choice for most parents who must self-pay. To minimize your costs, plan each cycle for the start of the plan year.
