Editor's note: This information was published on July 15, 2022.
With recent news about changes to healthcare related to pregnancy, you likely have questions about your healthcare spending account benefits and what they cover. Whether you have a health savings account (HSA), flexible spending account (FSA), health reimbursement arrangement (HRA), or lifestyle spending account (LSA), here's what we know so far.
What happened?
On June 24, 2022, the Supreme Court issued its ruling in Dobbs v. Jackson Women's Health Organization, overturning the constitutional right to an abortion that had been established by Roe v. Wade in 1973. The decision means individual states can now set their own laws regarding abortion access.
Since the ruling, many states have enacted new restrictions or bans, while others have moved to protect or expand access. This patchwork of state laws has created questions about how healthcare spending accounts interact with reproductive healthcare coverage.
What does this mean for reproductive health and family planning coverage?
The Dobbs decision does not directly change the IRS rules that govern HSAs, FSAs, HRAs, or other tax-advantaged benefit accounts. What is and isn't considered a qualified medical expense under Section 213(d) of the Internal Revenue Code has not changed as a result of this ruling.
However, the decision may indirectly affect coverage by changing what medical services are legally available in certain states. If a medical procedure is not legally available in your state, it may affect how and where you access care — but the expense may still be eligible for reimbursement from your benefits account if it is a qualified medical expense under IRS rules.
How do I know what's covered?
Coverage depends on the type of account you have and the specific rules that apply to it. In general, expenses that are considered qualified medical expenses under IRS Section 213(d) can be paid or reimbursed from your HSA, FSA, or HRA. For lifestyle spending accounts (LSAs), coverage depends on your employer's plan design.
You can always check for your specific medical expense on the list of HSA qualified medical expenses (QME) to see if a particular expense is eligible.
What are the specific rules for HSA, FSA, HRA, and LSA?
Each account type has its own rules and eligible expenses. Below we've outlined the key details for each. If you prefer, you can jump straight to the end for resources and next steps.
- Health Savings Account (HSA)
- Healthcare Flexible Spending Account (FSA)
- Health Reimbursement Arrangement (HRA)
- Lifestyle Spending Account (LSA)
Details on coverage by account and related topics
Health Savings Account (HSA)
HSAs can be used to pay for qualified medical expenses as defined by IRS Section 213(d). This includes many reproductive healthcare expenses such as contraception, fertility treatments, prenatal care, and pregnancy-related medical costs. The Dobbs decision does not change what the IRS considers a qualified medical expense.
If you need to travel to another state to receive a legal medical procedure, travel expenses (transportation, lodging up to $50/night) may also be eligible HSA expenses when the travel is primarily for and essential to receiving medical care.
Healthcare Flexible Spending Account (FSA)
FSAs follow the same IRS Section 213(d) rules as HSAs for determining eligible expenses. Reproductive healthcare expenses that qualify as medical expenses can be reimbursed through your FSA.
Keep in mind that FSA funds are typically use-it-or-lose-it within the plan year, so plan your contributions accordingly if you anticipate reproductive healthcare expenses.
Health Reimbursement Arrangement (HRA)
HRAs are employer-funded accounts, and eligible expenses are determined by both IRS rules and your employer's plan design. Many HRA plans cover the same reproductive healthcare expenses that are eligible under HSAs and FSAs, but your specific coverage may vary.
Check with your employer or benefits administrator for details about what your HRA covers.
Lifestyle Spending Account (LSA)
LSAs are employer-funded, post-tax benefit accounts with employer-defined eligible expenses. Some employers have expanded their LSA programs to include family planning, fertility support, or reproductive health benefits that may not be covered by traditional medical accounts.
If your employer offers an LSA, check your plan details to see what reproductive health and family planning expenses are included.
Stay tuned
The landscape around reproductive healthcare coverage continues to evolve. HealthEquity is committed to keeping you informed as new guidance and regulations emerge. Our teams are here to help.
For more information, see our resource: Using workplace benefits to support reproductive health and family planning.
