Question about Flex Spending Acct claiming infertility stuff is not covered! And the IRS deduction.

[Anonymous]

Back at the beginning of the year, when I was likely going to TTC but not assuredly, I called my Flex Spending carrier to ask whether things related to fertility would be covered and they game me a big fat no or at most said probably not be we can't guarantee until you submit the money. Based on that, I did not sign up or put any money in. I was scared to lose my $5k, which is the max. About a month ago, I called them back and said hey others are getting this covered what is the deal and after researching and calling me back lo and behold yeah it would all be covered. They said talk to your HR about the situation and maybe they would let you in late. I'm worried to do this because that means revealing that I'm trying to conceive and I work in the HR group.

Question: Do you think it's worth it to pursue or do you think I should just wait to do the IRS deduction since I may hit that amount? It both ends up being like a 30% discount right? Or do I have that wrong. Curious as to your experiences. Is there some hidden difficulty with the IRS deduction that I should be aware of and not count on that as a good way to go? Or do they end up equally as good financially?

Is the IRS deduction just on the amount that exceeds 7.5% of your salary or do you need to make that threshold and then all of it gets covered?

[Anonymous]

Hmmm a few thoughts - when is your annual sign up again (it could take a bit to get your plan going at an IF clinic) ? I think I'd try to pursue the option of still signing up only because depending on what you try in 2011 (if you haven't started treatments yet) they might be IUIs which probably wouldn't put you over the threshold for IRS deduction in the way that IVF would. Since you work in HR, is there anyone in the benefits department that you trust? I think I'd be tempted to couch it as a medical procedure that you called about (or claim cosmetic dental procedure or something) and say they told you that you couldn't use it, but now it turns out that you can - I also would avoid revealing my TTC status only to avoid future questions!!

[Anonymous]

Infertility expenses are definitely expenses that an FSA can be used for. As far as the way it works for the IRS, you have to meet the 7.5% threshold and then everything youve spent above that threshhold gets taken off. For example if you make 100,000 per year. You have to spend at least 7500 before anything can be taken off your taxes.

[Anonymous]

You can put some $ away for FSA. The remainder can be deducted in Schedule A, but has to exceed 7.5% of AGI. BTW, Maryland provides IVF assistance. Va does not. But, that's why Md has higher income taxes.

[Anonymous]

The OP didn't say if she was single or a lesbian, but Maryland's IVF law only applies when you are using your husband's sperm. In fact, you can be married but if you are using a sperm donor due to MF or whatever reason, I think the statute excludes you or does not encompass you. That's what happens when you let the Catholic Church lobby successfully in a state. Horrible.

[Anonymous]

Anonymous wrote:The OP didn't say if she was single or a lesbian, but Maryland's IVF law only applies when you are using your husband's sperm. In fact, you can be married but if you are using a sperm donor due to MF or whatever reason, I think the statute excludes you or does not encompass you. That's what happens when you let the Catholic Church lobby successfully in a state. Horrible.

No. That's what happens when you have employers and insurance companies who are looking for as many ways as possible to cut costs on a state-mandated benefit.

[Anonymous]

What on earth do the VA/MD laws have to do with the OP's question? The people who explained the 7.5% thing were correct - another thing to think about is that you'll hit that 7.5% threshold faster if you file separately from DH - but there are other disadvantages of being married filing separately. Best to consult an accountant if you have one.

[Anonymous]

FSA benefits are available regardless of marital status. I'm not sure why they told you know. Generally, the allowable items for FSA are the same items that would be allowable for a federal medical tax deduction.

http://www.irs.gov/publications/p502/index.html

So, a couple of weeks ago I had the same question that I think you are asking: does it make sense to max out your FSA benefits, or is it better to take the IRS tax deduction? What I read is that it is always better to use FSA funds to pay for the expenses, even if that means you don't reach the medical tax deduction threshold. Check out the answer to the second question.

http://wanderingtaxpro.blogspot.com/2008/01/ask-tax-pro-medical-fsa-income-tax.html

Of course, ask your own tax advisor for advice, but I think that if it is possible for you to get in the FSA late, you should try to do so.

[Anonymous]

"not sure why they told you NO..." sorry for the typo.

[Anonymous]

As to the percent "discount", it depends on your marginal tax rate.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The OP didn't say if she was single or a lesbian, but Maryland's IVF law only applies when you are using your husband's sperm. In fact, you can be married but if you are using a sperm donor due to MF or whatever reason, I think the statute excludes you or does not encompass you. That's what happens when you let the Catholic Church lobby successfully in a state. Horrible.

No. That's what happens when you have employers and insurance companies who are looking for as many ways as possible to cut costs on a state-mandated benefit.

I face the same restriction in DC, so I think it is more the excuse to cost-cut than the Catholic Church, the Catholics are not so influential in DC. It's discrimination and arbitrary discrimination at that.

[Anonymous]

Oh it is far from arbitrary. It was not happenstance. The words are specifically crafted to exclude and limit. And not for no reason. Pure family values bullsheet.