Departments issue FAQs on fertility benefits

The Departments of Labor, Health and Human Services (HHS), and the Treasury have issued FAQs about Affordable Care Act (ACA) Implementation Part 72. These FAQs provide new guidance on whether employers may provide fertility benefits such as in vitro fertilization (IVF) as an “excepted benefit” outside of primary medical coverage. Excepted benefits are exempt from various group health plan mandates in the Internal Revenue Code (IRC), ERISA and the Public Health Service Act (PHSA).

Executive order on IVF

As background, on February 18, 2025, President Donald Trump issued an Executive Order titled "Expanding Access to In Vitro Fertilization." It directed the assistant to the president for the Domestic Policy Council (DPC) to submit a list of policy recommendations to protect IVF access and aggressively reduce out-of-pocket and health plan costs for IVF treatment. One resulting recommendation was to issue regulations or guidance that would allow employers to expand employee access to fertility coverage through providing an excepted benefit.

Following up on that recommendation, the Departments issued this new FAQ guidance clarifying the existing categories of excepted benefits employers can use to offer fertility benefits, including the categories of independent, non-coordinated excepted benefits and limited excepted benefits. The FAQs also provide guidance on whether:

• Employers can offer fertility benefits on a “stand-alone” basis
• An excepted benefit health reimbursement arrangement (HRA) can reimburse out-of-pocket fertility expenses
• Fertility coverage under an excepted benefit affects an individual’s eligibility to make or receive health savings account (HSA) contributions
• An excepted benefit employee assistance program (EAP) can offer coaching and navigator services

Excepted benefits

Excepted benefits are described in the PHSA, ERISA and the IRC and fall within one of the following four categories:

1. Benefits excepted in all circumstances — such as onsite clinics, automobile insurance, liability insurance, workers compensation, and accidental death and dismemberment coverage
2. Limited excepted benefits — such as limited scope vision or dental benefits; certain healthcare flexible spending arrangements (FSAs); and benefits for long-term care, nursing home care, home healthcare or community-based care
3. Non-coordinated excepted benefits — such as specified disease or illness coverage (e.g., cancer and critical illness policies) and hospital indemnity or other fixed indemnity insurance (e.g., accident indemnity insurance)
4. Supplemental excepted benefits — such as coverage supplemental to Medicare, or to the Civilian Health and Medical Program of the Department of Veterans Affairs or to Tricare, or similar coverage that is supplemental to coverage provided under a group health plan and that is provided under a separate policy, certificate or contract of insurance

Independent, non-coordinated excepted benefits in the group market

These benefits are excepted from various group health plan mandates only if all of the following conditions are satisfied:

• The benefits are provided under a separate policy, certificate or contract of insurance.
• There is no coordination between the provision of such benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor.
• The benefits are 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 new FAQs provide the following guidance:

• An employer may offer fertility benefits as an independent, non-coordinated excepted benefit if the above conditions are met. For example, an employer could offer a specified disease or illness policy that covers benefits related to infertility as a type of independent, non-coordinated excepted benefit.
• If an employer offers a traditional group health plan and a specified disease or illness policy that covers fertility benefits, the participants do not have to enroll in the employer's traditional group health plan in order for the specified disease or illness policy to qualify as an excepted benefit.
• Specified disease or illness coverage, such as coverage only for infertility, cannot be self-funded by the employer and qualify as an independent, non-coordinated excepted benefit.
• An individual who is enrolled in fertility benefit coverage provided as an independent, non-coordinated excepted benefit may contribute to an HSA.

Limited excepted benefits

Limited excepted benefits are excepted if they are provided under a separate policy, certificate or contract of insurance or are otherwise not an integral part of a group health plan. The Departments have previously specified that certain healthcare FSAs, EAPs, excepted benefit HRAs and a pilot program for limited wraparound benefits would be considered limited excepted benefits.

The new FAQs provide that an employer can offer an excepted benefit HRA that reimburses an employee's out-of-pocket costs for fertility benefits, as long as it meets all four of the following conditions found in the Departments’ 2019 regulations:

1. 01

   Otherwise not an integral part of the plan

   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 is made available by the same plan sponsor for the plan year to the participant.

2. 02

   Benefits are limited in amount

   Amounts newly made available for each plan year under the HRA or other account-based group health plan do not exceed $1,800, adjusted for inflation ($2,150 for plan years beginning in 2025).

3. 03

   Prohibition on reimbursement of certain health insurance premiums

   The HRA or other account-based group health plan must not reimburse premiums for individual health insurance coverage; group health plan coverage (other than COBRA continuation coverage or other continuation coverage); or Medicare Parts A, B, C or D, except that the HRA or other account-based group health plan may reimburse premiums for such coverage that consists solely of excepted benefits.

4. 04

   Uniform availability

   The HRA or other account-based group health plan is made available under the same terms to all similarly situated individuals, regardless of any health factor.

With respect to excepted benefit EAPs, the FAQs provide that offering benefits for coaching and navigator services to help employees and their dependents understand their fertility benefits will not be considered to provide benefits that are significant in the nature of medical care, taking into account the amount, scope and duration of the covered services. However, an EAP would not constitute a limited excepted benefit if it offers any fertility benefits that are significant benefits for medical care. The EAP also 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.

Going forward

• Employer plan sponsors considering offering fertility benefits such as IVF to employees may do so as an independent, non-coordinated excepted benefit on a stand-alone basis to all employees (including those not enrolled in the employer’s traditional group health plan).
• Employer plan sponsors that offer an excepted benefit HRA may reimburse out-of-pocket expenses for fertility benefits.
• Employer plan sponsors may offer benefits for coaching and navigator services to help employees and their dependents understand their fertility benefits via an excepted benefit EAP.