Fertility treatments remain out of reach for many employees due to high costs, limited provincial funding, and uneven insurance coverage. This gap has made fertility benefits an urgent priority in today’s workplace. Fertility spending accounts are emerging as a key solution, helping reduce financial strain, supporting family-building, and promoting inclusivity. In this article, we’ll look at what fertility spending accounts are, what they cover, how to design them, and why they’ve become essential for attracting, retaining, and supporting a diverse workforce.
Key Takeaways
Understanding Fertility Spending Accounts
What Is a Fertility Spending Account? A fertility spending account is an employer-funded or tax-advantaged account specifically designed to help cover fertility-related medical expenses. Unlike general health spending accounts or lifestyle spending accounts, fertility benefits for employees focus solely on reproductive health costs, giving employees targeted support for their family-building journey.
These employee spending accounts typically come with features like an annual funding cap, reimbursement or prepaid models, and specific eligibility criteria. They’re often structured to work alongside other employee benefits such as health insurance and employee assistance programs (EAPs).
Why Fertility Benefits Are Important?
Fertility challenges touch many lives, not only couples but also same-sex partners, single parents by choice, and employees starting families later in life. Having access to a fertility spending account can remove the financial barriers that often delay or prevent people from pursuing their family-building goals.
Beyond easing costs, these benefits send a clear message: every employee’s journey to parenthood is valid and supported. This recognition builds trust and loyalty, creating a workplace where people feel seen, valued, and more committed to growing their careers.
How Does a Fertility Spending Account Work?
A fertility spending account gives employees a set allowance, often as an annual cap or lifetime maximum to reimburse eligible fertility and family-building expenses. Employees pay upfront, submit receipts, and are reimbursed up to their available balance, with costs either treated as a taxable benefit or, if CRA-eligible, through a non-taxable Health Spending Account structure. This setup provides predictable costs for employers while offering employees meaningful financial relief on treatments and related care.
Advantages & Drawbacks of Fertility Spending Accounts
While fertility spending accounts are designed with employees in mind, employers stand to gain just as much, especially in today’s evolving talent landscape. Here’s how fertility benefits contribute to business outcomes:
Advantages
- Helps employees manage the high cost of treatments like IVF, IUI, and fertility medications
- Promotes inclusivity by supporting same-sex couples, single parents, and diverse family structures
- Enhances employer brand and makes recruitment more competitive in talent-driven markets
- Costs are predictable for employers since annual or lifetime caps can be set
- Builds employee loyalty, trust, and long-term retention: According to Carrot’s Fertility at Work study, 77% of employees would stay at their company longer if fertility benefits were offered, and 88% said the lack of such benefits would prompt them to consider leaving.
Drawbacks
- Can be a high-cost benefit if not budgeted with proper caps and eligibility rules
- May have low utilization if the workforce is young or fertility is not a priority for most employees
- Complex tax treatment and compliance with Canadian laws (e.g., restrictions on surrogacy reimbursements) require careful administration
- May raise expectations for other benefit enhancements if not paired with a broader benefits strategy
And beyond the numbers, it’s a matter of values. Offering fertility employee benefits shows your organization walks the talk on inclusion, work-life balance, and holistic well-being.
What’s Covered by a Fertility Spending Account?
While coverage varies by employer, most fertility spending accounts are designed to offset the significant costs of reproductive care that fall outside standard health plans. The specifics are decided during the benefit design phase, employers set an annual or lifetime spending cap, determine eligible services, and decide whether the account is a standalone offering or integrated with other health benefits. In some cases, decisions are made in consultation with benefits advisors or insurers to ensure the plan aligns with organizational goals and budget.
Common eligible expenses often include:
Coverage parameters are usually set with two main considerations in mind:
- Budget and utilization – Employers balance the desire to offer meaningful support with the need to keep benefit costs sustainable. Some opt for a generous annual maximum (e.g., $10,000–$20,000) while others provide smaller but still valuable allocations.
- Inclusivity goals – Progressive organizations ensure that coverage supports a diverse range of family-building scenarios, not just those related to heterosexual couples with infertility diagnoses.
This flexibility allows organizations to tailor fertility employee benefits to the needs of their workforce while still managing overall benefits spending effectively.
Industry examples:
- Sun Life offers fertility benefits add-ons that employers can customize to cover a range of treatments and medications, with flexible maximums.
- Manulife allows fertility coverage to be integrated into a broader health benefits package or offered as a stand-alone allocation, making it adaptable to different budgets.
- Canada Life works with employers to create spending benefits for fertility that include counselling and diagnostic testing alongside treatment coverage.
This flexibility allows organizations to tailor fertility employee benefits to the needs of their workforce while still managing overall benefits spending effectively.
Make Fertility Benefits Part of Your Group Plan
Discover how a tailored fertility spending account can enhance your benefits package. Book a consultation with our group benefits specialists today.
Designing an FSA for Your Organization
A well-designed fertility spending account (FSA) can be a game-changer for employees and a strategic advantage for employers. While the core idea, allocating funds for fertility-related expenses, sounds simple, the design choices determine how effective and inclusive it will be.
1. Setting the Benefit Amount and Eligibility
The first decision is how much to provide and who can access it. This sets the tone for your organization’s commitment to supporting family-building.
Key considerations when deciding how much and who qualifies:
Example of Annual vs. Lifetime Maximums
| Plan Type | Annual Cap Example | Lifetime Cap Example | Pros | Cons |
|---|---|---|---|---|
| Annual Allowance | $10,000/year | N/A | Predictable yearly budgeting; ongoing support | May limit employees needing large one-time costs |
| Lifetime Maximum | N/A | $20,000 | Ideal for large, one-off expenses like IVF | Funds can be depleted quickly |
| Hybrid Model | $5,000/year | $15,000 lifetime | Balances sustainability and flexibility | Slightly more complex to administer |
2. Defining Covered Services
Coverage decisions are often made in collaboration with benefits advisors or insurers like Sun Life, Manulife, Canada Life, or RBC Insurance, who can provide cost modelling and usage data. The goal is to balance inclusivity with financial sustainability.
Factors that shape what’s covered:
- Employee demographics: Younger workforces may value egg/sperm freezing; older employees may prioritize advanced IVF.
- Budget: Higher allowances can cover surrogacy and donor-related costs; lower allowances may focus on core fertility treatments.
- Organizational values: Some employers intentionally include counselling or mental health support to address the emotional toll of fertility challenges.
Commonly Covered Expenses:
- Fertility assessments, ultrasounds, and diagnostics
- In vitro fertilization (IVF) and intrauterine insemination (IUI)
- Fertility medications and hormone therapies
- Egg, sperm, or embryo donor expenses
- Surrogacy-related agency and legal fees
- Genetic testing, PGT-A/PGT-M screening
- Storage fees for eggs, sperm, or embryos
- Counselling, therapy, or coaching related to fertility
3. Understand the Tax Implications
Fertility spending accounts (FSAs) have specific tax considerations under the Canada Revenue Agency (CRA) rules. In most cases, employer contributions to an FSA are treated as a taxable benefit. This means the reimbursed amount employees receive is added to their taxable income and reported on their T4 slip. Employees are only taxed on the value they use, not on the total balance allocated, while employers must ensure accurate payroll reporting and appropriate tax withholdings.
For example, If an employee uses $2,000 from their fertility spending account for IVF treatment, that $2,000 is added to their taxable income for the year. If they fall into a 30% combined tax bracket, they would pay around $600 in tax, leaving them with $1,400 net support toward their fertility care.
Non-Taxable Fertility Expenses (HSA Structure)
- Certain fertility treatments, such as IVF, IUI, and fertility medications, may qualify as CRA-approved medical expenses if reimbursed through a Health Spending Account (HSA).
- In this case, the reimbursement is non-taxable for employees and fully deductible for the employer.
Example: An employee with a $10,000 lifetime fertility allowance uses $6,000 for IVF at a licensed clinic. Because this qualifies under CRA medical expenses, the reimbursement is tax-free and does not appear on their T4.
Taxable Fertility Expenses (Standalone FSA, WSA, or LSA)
- Broader costs such as adoption fees, surrogacy-related legal costs, and long-term sperm/egg storage are not CRA-approved medical expenses.
- These reimbursements must be treated as taxable benefits, added to income and taxed accordingly.
Example: An employee uses $4,000 for adoption fees and $2,000 for sperm storage. That $6,000 is added to their taxable income. At a 30% tax bracket, they pay about $1,800 in tax, receiving $4,200 net value in support.
4. Integrating with Existing Benefits
Fertility spending accounts can be standalone or merged into broader offerings like a wellness spending account or lifestyle spending accounts. This integration allows employees to choose how to allocate funds, whether toward fertility, mental health, fitness, or other wellness needs, making benefits more personalized and flexible.
For example, an employee might use their fertility allowance for initial consultations, then direct unused funds toward complementary treatments like acupuncture, which some people find helpful during IVF cycles.
Key Considerations When Integrating Fertility Spending Accounts:
Communicating the Benefit Effectively
A generous benefit is only valuable if employees understand it, feel comfortable using it, and know how to access it.
Effective communication strategies include:
Additionally, providing curated lists of approved fertility clinics, mental health counselors, and other support resources makes it easier for employees to navigate their options.
Make Fertility Benefits Part of Your Group Plan
Discover how a tailored fertility spending account can enhance your benefits package. Book a consultation with our group benefits specialists today.
Tools and Platforms to Administer Fertility Benefits
Administering a fertility spending account manually can quickly become complex, especially when tracking receipts, reimbursements, and tax reporting. Many Canadian employers turn to digital benefits platforms or insurer-integrated solutions to simplify administration, ensure compliance, and improve the employee experience.
| Provider | Best For | What They Offer |
|---|---|---|
| Juno | Modern, growing companies looking for flexibility | Highly customizable platform where employers can define eligible fertility expenses alongside other wellness or lifestyle categories. |
| League | Employers seeking an integrated digital health solution | Offers fertility coverage as part of a broader health platform, combining ESAs with virtual care, health coaching, and employee engagement tools. |
| Collage | Small to mid-sized businesses | Affordable and easy-to-use platform; bundles HR, payroll, and benefits (including fertility accounts) into one system to reduce admin load. |
| Insurance Carriers (e.g., Manulife, Canada Life, Sun Life) | Companies already offering group benefits | Allows fertility spending accounts or fertility benefits to be added directly to existing group benefit plans, keeping everything in one portal. |
| Dialogue | Employers prioritizing holistic well-being | Canada-based digital health provider offering mental health, family health, and fertility navigation services integrated with ESA administration. |
Tip: When choosing a platform, ask about claim turnaround times, privacy protections, flexibility in eligible categories, and payroll integration for tax reporting. The right partner will reduce administrative burden while making the benefit accessible and easy for employees.
Impact on Talent Attraction, Retention, and Diversity
A well-structured fertility spending account isn’t just a benefit, it’s a statement that signals that your organization understands modern family-building realities and is willing to invest in them. This not only helps employees but also positions your organization competitively in a tight labor market. Here’s how fertility spending accounts deliver real value, not just for employees, but for your organization as a whole.
Boosting Talent Attraction
With more candidates actively seeking employers who align with their life priorities, fertility benefits have become a differentiator in job postings and recruitment conversations.
Why it matters for recruitment:
A 2023 FertilityIQ survey found that 68% of employees were more likely to choose an employer offering fertility coverage over one that didn’t.
Improving Employee Retention
The financial and emotional strain of fertility challenges can lead to increased absenteeism and even job turnover. Fertility spending accounts help mitigate these risks by providing financial relief and demonstrating genuine employer support.
Key retention drivers:
Research by Maven Clinic suggests that offering comprehensive fertility and maternity benefits can yield a 2x clinical ROI and 4x business ROI, underscoring the financial benefits of such offerings.
Advancing Diversity, Equity, and Inclusion (DEI)
Fertility benefits naturally support DEI efforts by acknowledging and addressing barriers faced by underrepresented groups in family-building. By covering donor services, surrogacy, and removing restrictive medical infertility requirements, fertility spending accounts create more equitable access for LGBTQ+ employees, single parents, and those with diverse reproductive needs.
How spending benefits for fertility support DEI:
By investing in fertility benefits, organizations demonstrate a genuine commitment to supporting diverse family-building needs, strengthening their workforce and culture.
When & When Shouldn’t You Opt for a Fertility Spending Account (FSA)
Choosing to add a fertility spending account depends on your workforce demographics, budget, and overall benefits strategy. Here are key conditions to guide your decision:
When You Should Opt for an FSA
- Your workforce is diverse and inclusive → Supports same-sex couples, single parents by choice, and employees planning families later in life.
- You want to strengthen recruitment and retention → Fertility benefits are highly valued and can set your company apart in competitive industries like tech, law, and finance.
- Your company values DEI (Diversity, Equity, Inclusion) → Offering fertility support demonstrates a commitment to supporting all paths to parenthood.
- You can budget with predictable caps → Annual or lifetime maximums (e.g., $5,000 per year or $15,000 lifetime) keep costs manageable while offering meaningful support.
- You want to build long-term loyalty → Employees often remember employers who support them during major life milestones like starting a family.
When You Shouldn’t Opt for an FSA
- Your workforce demographics don’t align → If most employees are very young or not interested in family-building, utilization may be extremely low.
- Your benefits budget is very limited → Fertility coverage can be costly; if resources are tight, a wellness or lifestyle spending account may deliver broader value.
- You lack administrative capacity → FSAs require compliance checks (e.g., CRA-approved vs taxable expenses, surrogacy restrictions in Canada), and mismanagement could create legal or tax issues.
- Your benefits strategy isn’t holistic → If core health and dental plans are weak, adding fertility benefits alone may feel unbalanced or inequitable to employees.
Questions? We Have Answers.
Still have a few question marks? Here are some quick answers to common employer & employee concerns.
Bottom Line,
Fertility spending accounts are quickly becoming a cornerstone of modern employee benefits, reflecting a deeper understanding of the diverse family-building journeys employees face today. By covering a wide range of fertility-related expenses and offering flexible, inclusive support, these accounts not only ease the financial burden on employees but also help employers attract, retain, and engage talent in meaningful ways.
Designing and communicating fertility spending accounts thoughtfully ensures your organization meets employee needs while reinforcing a culture of inclusion and care. In an era where family-building choices are evolving, fertility spending accounts are more valuable to your business than ever.
