Fertility Treatments May Soon Be HSA-Eligible: New Bill Proposes Tax Code Change

A new piece of legislation, titled the "Health Savings and Affordability for Fertility Act" (or "HSA for Fertility Act"), proposes a significant change to how Americans can pay for fertility treatments. If passed, this bill would amend Section 223(d)(2)(A) of the Internal Revenue Code of 1986, allowing individuals to use funds from their Health Savings Accounts (HSAs) for a range of fertility-related medical expenses. This change would apply to any qualifying expenses paid or incurred after the bill's enactment date.

Tapping Into Your HSA: What's Covered?

So, what does this mean for your Health Savings Account? Essentially, the bill aims to broaden the definition of "medical expenses" that your HSA can cover. Under SEC. 2, "fertility treatment" would officially become an HSA-qualified expense. The bill clearly defines this to include several common procedures and associated costs: (i) the preservation of eggs, sperm, or embryos (think cryopreservation); (ii) artificial insemination; (iii) assisted reproductive technology (ART), which is the category that includes treatments like in vitro fertilization (IVF); (iv) fertility medications; and (v) expenses related to gamete donation, such as donor reimbursement and any associated medical costs for the donor that the recipient covers.

For anyone with an HSA, this is a pretty big deal. HSAs allow you to set aside money pre-tax to pay for qualified medical expenses. By adding fertility treatments to this list, the bill could make these often costly procedures more financially manageable. Imagine you're looking at IVF, which can run into tens of thousands of dollars. Being able to use pre-tax HSA dollars could mean substantial savings.

Real-World Impact: Planning and Affordability

This proposed change directly impacts how individuals and couples can plan and budget for starting or expanding their families. For instance, if someone is undergoing IVF, they could use their HSA funds not just for the main procedure but also for the necessary fertility medications, which can be a significant recurring cost. Similarly, if egg or sperm preservation is part of their family planning strategy, those expenses could also be paid for with tax-advantaged HSA dollars.

The bill specifies that these amendments will apply to expenses paid or incurred after the date the Act is officially enacted. It's also important to note that this doesn't retroactively change anything for expenses paid before that date, nor does it limit how other fertility-related expenses might already be treated under the existing Section 223 of the Internal Revenue Code. It's a forward-looking expansion, aiming to make future fertility journeys a bit less financially daunting for those with HSAs.