IVF Refund Programs
Hidden Advantages of IVF Refund Programs
IVF refund programs are designed to help couples without insurance to make In Vitro Fertilization affordable enough to continue treatments and increase the odds of success. For couples failing to conceive, the refund helps preserve resources for other attempts, or to pursue adoption.
IVF Refund Basics
IVF refund programs are also referred to as shared risk, or guarantee plans. They are designed to help couples pay for IVF when insurance won’t. These plans can be broken down into four components.
Eligibility criteria: Your infertility clinic will perform a series of medical and diagnostic tests to qualify you for inclusion in the refund program. These fees are often not part of the plan.
Multi-cycle commitment: If you qualify, you will be asked to prepay for a number of IVF cycles. Clinics will ask you to purchase between three to six cycles. Most women will need multiple cycles to raise the odds of conception.
Success criteria: The clinic will define what is meant by success - fetal heart beat at X weeks, live birth, etc. Treatments end at this point and the clinic keeps the entire fee.
Refund: If the clinic fails to meet the success criteria you are refunded a portion of the upfront fee - somewhere between 70% to 100%. You can use these funds to try again, or pursue adoption.
For the sake of illustration we will use cost and statistics figures provided by Attain Infertility.
IVF Shared Risk Plans: An Informed Bet
Before offering an opportunity to participate in an IVF rebate plan, your infertility clinic will perform some medical testing to see if you meet their clinical acceptance criteria. This medical eligibility criteria is used to determine your probability of getting pregnant. If you pass the criteria, the clinic will share risk with you because they believe that IVF will be successful based upon their previous experience. If you fail the criteria, your odds of conception make sharing risk with you unprofitable.
Clinics offering guarantees often quote that 70% of applicants are approved, and that 75% of refund plan participants bring home a baby. What they don’t always point out that if accepted into the program you have a 75% chance of paying the full $24,000, plus costs for testing, fertility drugs and other incidentals.
How will you cover these costs when there is also the chance of experiencing a high-risk pregnancy, or pre-term delivery if you conceive multiples? This is often followed by an unpaid maternity leave.
Play the house odds. Your clinic is betting that you will get pregnant. Make the same bet. Purchase supplemental insurance before starting your next IVF cycle. Your benefit for normal delivery may be several multiples of your premium paid. Additional benefits may be paid for complications, and premature birth.
With a 70% chance of conception, the odds are strongly in your favor no matter the outcome. If you fail to conceive the clinic refunds your money. If you deliver a baby, supplemental insurance pays benefits directly to you that offsets much of what you paid the clinic.
IVF Guarantee Programs: Hidden Tax Savings
IVF refund programs provide hidden tax savings embedded in the multi-cycle commitment you make.
First a few tax basics. Your In Vitro Fertilization costs are considered deductible medical expenses. You can pay for IVF using your Flexible Spending Account(FSA), or by making an itemized deduction on Schedule A at the end of the tax year.
There are pros and cons to using the two different tax vehicles. The primary disadvantage of an FSA is its limited availability, and the employer imposed contribution limits. The published cost of $24,000 exceeds most FSA contribution limits so they are of little value in this instance.
The primary disadvantage of Schedule A deductions is the Adjusted Gross Income (AGI) hurdle imposed by the IRS. Only deductible medical expenses in excess of 7.5% of AGI qualify for deductions. And this is the hidden tax advantage of an IVF refund plan.
Lets take a simple example to illustrate this point. Suppose your AGI was $100,000 in a given tax year. The first $7,500 of un-reimbursed IVF and infertility costs would generate no tax savings. If you did one IVF cycle per tax year you might lose a big chunk of deductible expenses.
An IVF guarantee program multi-cycle commitment can lump all your expenses into a single tax year. This means you lose the $7,500 expense hurdle money only once, and get a tax break on the remainder - $16,500 of deductible expenses.
Source of refund examples: Attain Fertility