READ TIME: 5 MINUTES
On Oct. 16, 2025, the Departments of Treasury, Labor (DOL), and Health and Human Services (HHS) (“the Agencies”) jointly issued FAQs About Affordable Care Act Implementation Part 72 to clarify how fertility-related benefits may qualify as “excepted benefits” under existing federal regulations.
The FAQs address how employers may offer fertility coverage outside of a group health plan without triggering the Affordable Care Act (ACA) market-reform requirements (i.e., health status nondiscrimination requirements, preventative care coverage, etc.). Specifically, the agencies examined three regulatory pathways:
- Independent, non-coordinated excepted benefits
- Excepted benefit health reimbursement arrangements (HRAs)
- Employee Assistance Programs (EAPs)
Each approach has different compliance implications and design constraints that employers should evaluate carefully.
Independent, Non-Coordinated Excepted Benefits
The Agencies confirmed that fertility coverage may qualify as an independent, non-coordinated excepted benefit when offered through a fully insured policy that meets the existing excepted benefit requirements. To qualify:
- The benefit must be provided under a separate policy, certificate, or contract of insurance.
- The policy must operate independently of the employer’s primary group health plan, with no coordination of benefits or eligibility.
- Coverage must be available regardless of enrollment or benefits under the employer-sponsored health plan or other individual coverage.
- The policy cannot be self-funded by the employer.
The Agencies indicated that further rulemaking is under consideration to expand the ways that fertility benefits may qualify as excepted benefits, potentially including self-funded arrangements.
Employers pursuing this option should coordinate with an insurer to ensure the policy is separately issued and administered and review plan communications to confirm there is no overlap or coordination with the employer’s group medical plan.
Excepted Benefit HRAs
The FAQs also clarify that an excepted benefit HRA can reimburse fertility-related expenses, subject to the usual limits and eligibility rules. Under current law:
- The employer must also offer a group health plan that is not limited to excepted benefits or that is not an account-based health plan (i.e., HRA) to the same employee population.
- Annual employer contributions cannot exceed $2,150 for 2025 (adjusted annually for inflation).
- Reimbursable expenses must qualify as medical care under Internal Revenue Code 213(d).
- The HRA is available to all similarly situated individuals under the same terms.
An employer may design the HRA either to reimburse all medical expenses up to the annual limit or to restrict reimbursement to fertility-related expenses only.
This approach allows targeted financial support within defined limits. Employers should ensure plan documents and administrative systems accurately reflect the reimbursement scope and that employees receive clear guidance on eligible expenses.
Employee Assistance Programs (EAPs)
Finally, the agencies confirmed that an EAP can continue to qualify as an excepted benefit even if it offers fertility-related coaching, navigation, or education as long as it does not provide significant medical benefits.
An EAP would lose excepted benefit status if it:
- Provides or pays for clinical fertility treatments or other medical care.
- Coordinates benefits with the employer’s group health plan.
Employers that wish to support employees through informational or counseling services can safely include those services within an EAP, provided they are non-medical and clearly independent of other plan coverage.
Employer Action Items
- Assess current coverage to determine whether and how fertility services are currently provided under existing plans.
- Consider whether offering fertility benefits as an excepted benefit aligns with the organization’s cost and benefits strategy.
- Confirm that any new design meets the applicable excepted benefit criteria and complies with state insurance and tax requirements.
- Engage insurers, TPAs, or HRA administrators early to confirm operational feasibility.
- Amend plan documents, summary plan descriptions, and employee communications as needed.
This information has been prepared for UBA by Fisher & Phillips LLP. It is general information and provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors.
