On October 16, 2025, the Departments of Labor, Health and Human Services, and Treasury (the “Agencies”) issued FAQ 72, Frequently Asked Questions about Affordable Care Act Implementation (the “FAQs”). The FAQs have declared that certain types of fertility benefits will be “excepted benefits,” exempt from various requirements of the Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”), such as health status nondiscrimination. In addition, various Affordable Care Act (“ACA”) requirements, like the prohibition on annual and lifetime dollar limits for essential health benefits and the requirement for preventive care coverage, will not apply provided certain conditions are met, and thus make fertility benefits easier for employers to provide.
Independent Non-Coordinated Benefit
One type of excepted benefit is an independent non-coordinated benefit, which is a type of benefit provided in the group health insurance market. To qualify as an independent, non-coordinated benefit in the group market (i) the benefit must be provided under a separate policy, certificate or contract of insurance; (ii) there must be no coordination between the provision of such benefit and any exclusion of benefits under any group health plan maintained by the same plan sponsor; and (iii) the benefit must be paid regarding an event whether or not benefits are provided for such event under any group health plan maintained by the same plan sponsor.
In the FAQs, the Agencies have indicated that an employer may offer fertility benefits as an independent non-coordinated excepted benefit. An independent non-coordinated benefit must be offered as a fully insured arrangement: it cannot be self-funded. As such, if an employer offers a group health plan and a specified disease or illness policy that covers fertility benefits, participants will not be required to enroll in the employer’s traditional group health plan for the specified disease or illness policy to qualify as an excepted benefit and generally be exempt from the requirements of the ACA.
An individual who is enrolled in fertility coverage provided under an independent non-coordinated excepted benefit is not disqualified from participating in a Health Savings Account, or HSA.
Limited Excepted Benefit
Another type of excepted benefit is a limited excepted benefit. This is the category under which dental and vision benefits are exempted from most ACA requirements. This category of benefit can be provided separately or in combination with other excepted benefits and can be either fully insured or self-funded. If fully insured, the limited benefit must be offered under a separate policy from the group health plan. A limited benefit must be limited in scope and must not be integrated into the employer’s primary health plan. It must be available to all similarly situated employees or members of the plan and must not be considered an integral part of the plan.
The FAQs allow fertility coverage to be provided as a limited excepted benefit. As such, the Agencies have indicated that a plan sponsor may offer an excepted benefit health reimbursement arrangement, or HRA, that reimburses an employee’s out of pocket costs for fertility benefits. The HRA must be entirely employer-paid, so there can be no employee premium for the coverage, and no employee cost-sharing for the benefit. There must be a dollar cap on the benefit paid: $2,150 for plan years beginning in 2025 and $2,200 for plan years beginning in 2026.
An employer may also offer benefits for fertility coaching, or for a fertility navigator service, to help employees and their dependents understand their fertility options. This assistance may be offered under an employee assistance plan, or EAP, that qualifies as a limited excepted benefit. An employee assistance plan must not provide significant medical benefits; a fertility benefit that consists of treatment for a fertility condition would be a medical benefit for purposes of evaluating the EAP’s compliance with this requirement. However, employers could offer treatment for a fertility condition under its group health plan and just offer coaching or a navigator service under its EAP while preserving the EAP’s limited excepted benefit status.
The Agencies stated that they intend to issue proposed regulations providing additional ways that certain fertility benefits may be offered as limited excepted benefits. They are also considering whether to modify the standards under which supplemental health insurance coverage provided by a group health plan, including a supplemental benefit for fertility coverage, will be considered as satisfying the conditions for an excepted benefit. For example, supplemental coverage excepted benefits currently are limited to 15% of the cost of the plan sponsor’s primary health care coverage, calculated in the same manner as COBRA premiums; the Agencies are considering whether that limitation should be increased.
As we move into open enrollment season, employers who are considering increasing coverage for fertility benefits for their employees should be aware of these changes and the possibility of more alternatives to come when designing their 2026 benefit programs. If you are considering increasing fertility benefits for employees, please contact one of the authors to explore the alternatives available for 2026 benefit programs.