Mindy Berkson

125 c Plans and Infertility Options

Paying for any type of medical treatment can be separated into three basic options. • Healthcare plans usually offered by your employer or professional organization. • From your own savings or other private arrangement such as a bank loan. • Grants and other programs offered by some patient advocacy groups and clinics.

Unfortunately, with many healthcare plans limiting coverage the second option is often the only option for many couples wanting to conceive their own child. Couples will pull funds from many sources to cover out of pocket expenses in treating their infertility as well as attempt to gain coverage through their health insurance coverage. The most common out of pocket solutions are cash reserves, home equity lines of credit, secured or unsecured loans, and retirement savings plans. Section 125( c) medical savings plans, employer sponsored savings plans, are a type of hybrid of these two funding sources.

Even though flexible medical spending accounts are limited in what types of treatments the account can be used to pay for and amount of money that can pass through them in a single year, they are excellent venues to pay for some medical expenses. Health savings accounts have two big benefits.

• Pre tax dollars set aside

• Non taxable withdraws

Even though these are many slightly different programs which your employer may offer the idea behind them is basically the same. Employees can set aside a limited amount of pre tax dollars from their paychecks into a savings account, and then use those funds to reimburse yourself once you have paid out of pocket for medical care. Each plan has limitations on the amount that you can set aside, what constitutes a reimbursable medical expense, and the time frame (usually these need to be used annually).

The IRS has defined what is allowed to be reimbursed from these accounts, and some to most fertility treatments do qualify. Exactly what is allowed for reimbursement depends upon the type of account. The rules for these accounts and eligibility are complex and should be discussed with your Human Resources or Benefits department. Speak with your Financial Advisor or Accountant to make sure you understand all of the possible tax implications of using the health care flexible spending account.

Of all of the ways to personally fund infertility treatment Section 125 ( c) plans offer the most benefits with the least restrictions and penalties. Why dip into your cash reserve and risk your financial well being, or whittle away at your retirement when other options have not been exhausted. Ask your Infertility Consultant to point you to a financial expert if you don’t already have one. Often just reducing the stress that finances put on infertility treatment can help increase your chances of success.

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