On October 16, 2025 the Departments of Labor, Health and Human Services, and the Treasury (the Departments) released “FAQs about the Affordable Care Act Implementation Part 72” addressing the treatment of fertility benefits as “excepted benefits.” As a reminder, excepted benefits are group health plans providing certain benefits that do not have to comply with certain legal requirements.
Benefits can be classified as “excepted” in the following ways:
- Benefits that are not generally health coverage (ex: automobile insurance);
- Limited excepted benefits;
- Independent, non-coordinated excepted benefits; and
- Supplemental excepted benefits (supplemental Medicare policies, etc.)
The Departments indicate that fertility benefits can qualify as a limited excepted benefit or as an independent, non-coordinated excepted benefit.
Fertility Benefits as a Limited Excepted Benefit
Limited excepted benefits provide benefits under a separate policy, certificate, or contract of insurance, or are otherwise not an integral part of a group health plan. The Departments have the power to specify limited excepted benefits via regulation and have previously done so when allowing excepted benefit health reimbursement arrangements (HRA). The FAQs state that fertility benefits can be reimbursed by an excepted benefit HRA provided all excepted benefit HRA requirements are met.
Additionally, an employee assistance program (EAP) that does not provide significant medical benefits, and satisfies other requirements, can be a limited excepted benefit. The Departments clarify that an EAP will not be treated as providing “significant benefits in the nature of medical care” solely because it offers “coaching and navigator services to help individuals understand their fertility options.”
However, EAPs that offer fertility benefits that are “significant benefits in the nature of medical care” would not qualify as limited excepted benefits. Additionally, the EAP cannot coordinate benefits with the group health plan, employee contributions/premiums cannot be required for the EAP, and there can be no employee cost sharing under the EAP.
Fertility Benefits as an Independent, Non-Coordinated Excepted Benefit
The Departments clarify that fertility benefits can be offered as an independent, non-coordinated excepted benefit. To be an independent, non-coordinated excepted benefit:
- the benefits must be provided under a separate policy, certificate, or contract of insurance;
- there is no coordination between the excepted benefit and any exclusion under a group health plan offered by the employer; and
- the benefits are paid without regard to if the group health plan covers the same situation.
Fertility benefits that satisfy the requirements above qualify as an independent, non-coordinated excepted benefit. Participants can enroll in fertility benefits that qualify as an independent, non-coordinated excepted benefit without also enrolling in an employer’s group health plan. Note that the fertility benefits cannot be self-funded and meet the conditions to be an independent, non-coordinated excepted benefit since the benefits must be provided under “a separate policy, certificate, or contract of insurance.”
Finally, the FAQs states that being covered by fertility benefits that qualify as an independent, non-coordinated benefit does not impact HSA contribution eligibility.
Key Takeaway
Employers would be well served to review the guidance surrounding treatment of fertility benefits as excepted benefits to understand how those benefits could be used with in connection current benefits or as a new benefit offering.
The information provided is a summary of laws and regulations relating to employee benefit plan compliance. This information should not be construed as legal advice. In all cases, employers should consult with their own legal counsel.
