It’s a common scenario. A couple gets married and waits to start trying for a baby until they pay off their student loans, buy a house, and feel financially secure. But then, they discover that getting pregnant is not so easy.
As more and more women wait longer to start a family, many find out that they’ll need help to conceive. Unfortunately, these couples are often shocked to discover how much fertility treatments actually cost.
Keep reading to understand how much fertility treatments cost, how to find coverage for those treatments, and if you’ll have to pay extra taxes on those benefits.
Cost of Fertility Treatments
The average amount that people will spend on fertility treatments depends on what treatment they receive. Here are the most popular treatment types:
Oral Medications
Some women who are having trouble getting pregnant will be prescribed oral medications to take before going a more invasive route. These drugs can cost several hundred dollars in total, depending on how long a person takes them for and what their insurance covers.
People can often find generic prescriptions for less or use discount prescription suppliers like Cost Plus Drugs.
IUI
Some couples experiencing fertility problems will start with an IUI cycle before resorting to IVF. IUI requires that the woman take medication to encourage egg production before being inseminated with sperm in the clinic.
IUI typically costs between $500 and $4,000 per cycle, depending on the medication used, monitoring visits, and other factors.
IVF
The IVF process involves the woman receiving injections over the course of eight to 14 days to stimulate egg production. Once the eggs have matured, the reproductive endocrinologist retrieves them. The eggs will then be fertilized with the partner’s or donor’s sperm to create embryos. If there are any viable embryos, the doctor will then implant them into the woman.
The average cost of an IVF cycle is around $23,000, including medication, ultrasounds, genetic testing, and the egg retrieval itself. This may also include the cost of storing embryos for a certain period of time.
Unfortunately, many women will need more than one IVF cycle to get pregnant. According to research from Australia, women between 30 and 31 had a 48% chance of having a baby after just one IVF cycle, whereas women between 34 and 35 had a 40% chance of having a baby after one IVF cycle. This means many couples will need to spend more than $50,000 on IVF to get pregnant.
Employer Coverage for Fertility Treatments
Some companies may cover a certain number of IUI or IVF cycles, while others provide an annual or lifetime maximum for fertility treatments. Often, a person needs to work at the company for a minimum amount of time to qualify for these benefits.
Fortunately, research has found that companies are starting to increase fertility treatment coverage. In 2020, 28% of companies with more than 500 employees covered IVF, compared to 23% in 2015.
Some major companies even provide coverage for minimum-wage employees. For example, both part-time and full-time Starbucks employees can receive up to $25,000 per IVF cycle, with an extra $10,000 for IVF medications. Walmart offers a $20,000-lifetime limit for fertility treatments for its employees.
State Coverage
While the federal government and most states still do not require that insurance companies cover fertility treatments, the following states do require that insurance companies offer some kind of fertility coverage:
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Hawaii
- Illinois
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Montana
- New Hampshire
- New Jersey
- New York
- Ohio
- Rhode Island
- Texas
- Utah
- West Virginia
Coverage may vary from state to state. For example, some states only require that companies with at least 25 employees provide coverage, whereas others have a 50-employee minimum. Also, you may need to have an infertility diagnosis to qualify. Policies may also exclude most LGTBQ+ couples, as well as trans individuals.
Tax Benefits and Consequences
There’s some hope for couples spending a fortune to get pregnant. The IRS allows a special deduction for any amount used for medical expenses that is more than 7.5% of your Adjusted Gross Income (AGI).
AGI is your total income minus items like contributions to a traditional retirement account, student loan interest, 50% of self-employment taxes, and health insurance premiums if you’re self-employed.
For example, let’s say your AGI is $100,000 and you spent $9,000 on medical expenses over the past year. In this case, you can deduct $1,500 in medical expenses on your taxes. Remember, only the amount that is greater than 7.5% of your AGI will qualify for the tax deduction.
If you are eligible to deduct medical expenses, make sure to track your costs in a spreadsheet. This will make it easier to calculate the correct deduction come tax time. Be sure you also track the miles you drive related to your medical expense because you can deduct 22 cents per mile.
Unfortunately, this deduction is only available to consumers who itemize their deductions instead of taking the standard deduction. And, since the standard deduction for 2023 is $13,850 (or $27,700 for those married filing jointly) , it still makes sense for most people to take the standard deduction. If you’re confused about which deduction option is better for you, talk to a qualified tax expert. They can comb over your figures to determine which tax strategy is best for you.
How Employer Contributions Impact Your Taxes
Most of the time, if your employer’s health insurance plan covers fertility treatment expenses, you will not have to report that on your taxes.
Some companies will also contribute to an employee’s Health Reimbursement Account (HRA), which workers can use to pay for out-of-pocket medical expenses. Those contributions will not be reported on your taxes.
However, if you receive a stipend for medical expenses that is not part of an HRA, then you may have to report that on your taxes. If you’re not sure what kind of contribution you’re getting from your employer, talk to your HR department. You may want to meet with a tax expert if you have to report fertility contributions on your taxes to decide how to plan ahead.
The Bottom Line
Grappling with the financial aspect of fertility treatments can be difficult to manage. Make sure you explore all possible avenues to determine how much it will cost and how much you can afford to pay. Talk to a financial planner if you want to know how paying for these treatments will impact your future finances.
