The very high cost of fertility treatments has been one of the greatest impediments to family building in California over the last few years. The price of one round of IVF has been in the range of 20,000 dollars, and this has left many families with the impossible decision between making a living and achieving their parenthood dream.
Such a landscape is on the verge of being transformed. California Senate Bill 729 (SB 729) goes into effect fully in 2026 and would fundamentally change the financial structure of fertility care. Nevertheless, although the new insurance requirement will reduce the barrier to entry, it is necessary to know the rest of the tax implications as a way of maximizing your savings.
What is SB 729?
Starting with plan years beginning on or after July 1, 2025 (completely in effect in 2026), large group health insurance plans in California are henceforth obligated to provide coverage of infertility diagnosis and treatment. Look for an expert (like an EDD audit attorney in Los Angeles) for some additional help.
Covered Persons: The presumption covers large group health insurance plans (usually those employers that have more than 100 employees) that are regulated at the state level. It is also noteworthy that it covers same-sex couples and single persons, eliminating the outmoded concept of infertility being applicable only to heterosexual couples who have not conceived after one year of unprotected sex.
Coverage: The plans are required to cover three egg retrievals and unlimited embryo transfer (medically appropriate). This is a fundamental change in terms of shifting IVF from a luxury out-of-pocket cost to a regular medical benefit
Tax connection with the IVF mandate
Herein lies the Franchise Tax Board (FTB) and your federal tax return. On the face of it, the fact that the major procedures are now covered by insurance, this may make you believe you lose the deductions on medical. The fact is that it is the opposite.
According to the Internal Revenue Code (IRC SS213), you are allowed to claim up to 7.5% of your Adjusted Gross Income (AGI) on the cost of medical expenses. In the past, it was hard to achieve that 7.5 percent mark unless you were paying half the full IVF cycles yourself.
The fact that you are insured to receive the 20,000 to 30,000 procedures is now pushing you past the 7.5% AGI faster, since you will not be paying your own money, either in the form of deductibles, copays, or uncovered ancillary services.
Costs Attributable to the Deduction (Usually):
- Transportation: Distance (22 cents per mile in 2026) to the clinic.
- Prescriptions: Fertility drugs, despite being partially billed to a pharmacy benefit card.
How to maximize the benefits?
In order to make sure that you do not leave money on the table when you file your 2026 taxes in early 2027, consider the following strategies:
Compare the limits on the maximum out-of-pocket (MOOP)
In case you have a choice in open enrollment, compare the maximum out-of-pocket (MOOP) limits. The optimal fertility plan is not necessarily the one that has the least premium, but the plan that limits your exposure. When you reach that MOOP limit through IVF, then all other medical treatment during the year is free.
See also: Trulife Distribution Lawsuit: Examining Allegations of Misrepresented Achievements
Open a Health Savings Account (HSA) or Flexible Spending Account (FSA)
Despite the requirement, you will be paying copays and deductibles. Using pre-tax funds in an HSA or FSA to pay them is an effective way to get a discount on the amount paid that is equivalent to your marginal tax rate (usually 22-35%). Getting a professional (like a San Diego tax attorneys) will make the path of taxation easy for you.
Keep a Fertility Ledger
Since you will probably reach the 7.5% threshold of AGI, it is essential to keep records of this carefully.
- Track every mileage log.
- Keep all Explanations of Benefits (EOBs) of insurance.
- The medical and non-medical (e.g., hotel stay on travel are not usually deductible, but medical mileage deduction is).
SB 729 is an access game-changer that does not eliminate costs but redistributes costs. The California families will be able to leverage a major life event into a strategic financial move by becoming aware of the fact that these remaining out-of-pocket expenses are now more likely to be tax-deductible.
Michael is always encouraged to speak with a tax professional who may be well-informed concerning medical deductions; however, now that you know the road to parenthood has just been made a bit cheaper.
