On October 16, 2025, the Departments of Treasury, Labor, and Health and Human Services issued FAQs about Affordable Care Act Implementation Part 72, which clarify how employers may offer fertility benefits as a HIPAA excepted benefit under existing regulations. The Departments also state that they intend to propose notice and comment rulemaking to provide additional ways that employers may offer certain fertility benefits as excepted benefits, including specifically considering whether to modify the excepted benefit rules for supplemental benefits to provide fertility coverage.
The Departments issued the FAQs in response to the February 2025 Executive Order (EO 14216), “Expanding Access to In Vitro Fertilization.” The EO directs the Assistant to the President for the Domestic Policy Council (DPC) to submit a list of policy recommendations to protect In Vitro Fertilization (IVF) access and aggressively reduce out-of-pocket and health plan costs for IVF treatment. As part of those policy recommendations, the Assistant to the President for the DPC recommended issuing regulations or guidance that would allow employers to expand access to coverage for fertility through the provision of an excepted benefit.
The FAQs address the current regulations for three categories of excepted benefits: (1) independent, noncoordinated benefits; (2) excepted benefits HRAs; and (3) employee assistance programs (EAPs). Excepted benefits are benefits that generally do not have to comply with the HIPAA and Affordable Care Act market reform requirements (e.g., health status nondiscrimination, prohibition on annual and lifetime dollar limits, preventive care coverage) if certain conditions are met.
Independent, Noncoordinated Benefits
Independent, noncoordinated excepted benefits include insurance coverage only for a specified disease or illness and hospital indemnity or other fixed indemnity insurance. To be an excepted benefit: (1) the benefits must be provided under a separate policy, certificate, or contract of insurance; (2) there can be no coordination between the provision of such benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor; and (3) the benefits must be paid with respect to an event without regard to whether benefits are provided with respect to such event under any group health plan maintained by the same plan sponsor or, with respect to individual coverage, under any health insurance coverage maintained by the same health insurance issuer.
The FAQs clarify that, under the existing regulations, an employer may offer fertility benefits as an independent, noncoordinated excepted benefit, if the above conditions are met (e.g., an employer could offer a specified disease or illness policy that covers benefits related to fertility). Participants are not required to be enrolled in the employer’s traditional group health plan. Also, the fertility coverage must be insured and cannot be self-insured by the employer. However, the Departments note that they intend to undertake future notice and comment rulemaking to provide additional ways that certain fertility benefits may be offered as a type of limited excepted benefit, such as permitting an employer to provide these benefits on a self-funded basis.
GROOM INSIGHT: The FAQs note that an individual who is enrolled in fertility benefit coverage provided as an independent, noncoordinated excepted benefit can contribute to an HSA. This is because Code section 223 permits an individual to have insurance for a specified disease or illness.
Excepted Benefit HRAs
Excepted benefits HRAs qualify as excepted benefits if: (1) the employer makes available other group health plan coverage that is not limited to excepted benefits and that is not an HRA or other account-based group health plan; (2) amounts newly made available for each plan year does not exceed $1,800, adjusted for inflation ($2,150 for the 2025 plan year); (3) the HRA does reimburse certain health insurance premiums; and (4) the HRA is made available under the same terms to all similarly situated individuals, regardless of a health factor.
The FAQs clarify that, under the existing regulations, an employer can offer an excepted benefit HRA that reimburses an employee’s out-of-pocket fertility costs, up to the specified limit.
GROOM INSIGHT: An employer could structure the excepted benefit HRA to pay all out-of-pocket medical expenses, up to the $2,150 (for 2025) limit, or the employer could structure the excepted benefit HRA to only pay for out-of-pocket fertility expenses. Note, however, that the HRA can only pay for fertility expenses that are Code section 213(d) medical care.
Employee Assistance Programs
An EAP qualifies as an excepted benefit if (1) it does not provide significant benefits in the nature of medical care, taking into account the amount, scope and duration of covered services; (2) it does not coordinate with benefits under another group health plan; (3) participants are not required to exhaust benefits under the EAP before being eligible for benefits under another plan; (4) participation in the EAP may not be dependent on participation in another group health plan; and (5) no employee premiums or contributions are charged, and there is no cost-sharing.
The FAQs clarify that, under existing regulations, an EAP will not be considered to provide benefits that are significant in the nature of medical care solely because it offers benefits for coaching and navigator services to help individuals understand their fertility options. However, the EAP cannot offer any fertility benefits that are significant benefits in the nature of medical care, the EAP cannot be coordinated with benefits under another group health plan, no employee premiums or contributions can be required as a condition of participation, and there must be no cost sharing under the EAP.
GROOM INSIGHT: Most fertility arrangements cover more than coaching and navigator services and thus are not EAPs. However, an employer could design its program such that the fertility services themselves are covered under the major medical plan, a specified disease policy, or an excepted benefit HRA, and the EAP covers just coaching and navigator services.
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