On October 16, 2025, the Departments of Labor, Health and Human Services, and Treasury (jointly Departments) issued ACA FAQs Part 72, clarifying how employers can offer fertility benefits as excepted benefits under federal law. This guidance provides new flexibility to meet growing employee demand for family building support while maintaining compliance with federal health plan rules.
This guidance is especially relevant for employers seeking to expand fertility offerings without triggering Affordable Care Act (ACA) mandates such as preventive services coverage, annual and lifetime dollar limits, and PCORI fees. The guidance outlines compliant pathways for structuring fertility benefits outside of traditional group health plans.
Background
In general, excepted benefits are types of coverage that are not subject to ACA market reform rules. They fall into four categories: benefits excepted in all circumstances (e.g., onsite clinics and workers’ compensation), limited scope benefits (e.g., vision or dental coverage), non-coordinated excepted benefits (e.g., specified disease or hospital indemnity policies), and supplemental benefits (e.g., coverage that supplements Medicare or Tricare).
Historically, offering stand-alone fertility benefits has been challenging due to ACA compliance rules. A health reimbursement arrangement (HRA) that reimburses medical expenses must be integrated with a group health plan to avoid violating ACA requirements. HRAs are employer funded, account based plans that require formal documentation and administration. Many employers have used specialty HRAs to support high cost, under covered services such as fertility treatments, gender-affirming care, abortion or medical travel. These HRAs must be carefully designed to avoid disqualifying employees from contributing to health savings accounts (HSAs), typically by reimbursing expenses only after the employee meets their high-deductible health plan threshold (often referred to as a post-deductible HRA).
FAQs Part 72
Fertility Benefits May Qualify as Independent Excepted Benefits
ACA FAQs Part 72 confirm that fully insured fertility coverage may qualify as an independent, non-coordinated excepted benefit under existing federal law. Specifically, this type of coverage falls under the definition of excepted benefits and allows for coverage limited to a specified disease or illness, such as cancer only policies or hospital indemnity insurance policies.
To meet the criteria for a non-coordinated excepted benefit, the fertility coverage must be fully insured, offered separately from the employer’s group health plan, and not conditioned on enrollment in that plan. This structure enables employers to offer fertility benefits independently, without subjecting the coverage to ACA market reform requirements or disqualifying employees from contributing to a Health Savings Account (HSA).
While this clarification opens the door for a new benefit design strategy, it is important to note that availability of fully insured, stand-alone fertility products is currently limited. Most state insurance markets do not yet offer such products, and it remains to be seen whether carriers will develop compliant offerings in response to this guidance.
Excepted-Benefit HRAs Can Reimburse Fertility Expenses
Employers that offer a group health plan may use an Excepted Benefit Health Reimbursement Arrangement (EBHRA) to reimburse certain fertility related expenses. While EBHRAs have been available for several years, ACA FAQs Part 72 reinforces that they remain a valid and compliant option for supporting fertility care. To qualify, the employer must make a traditional group health plan available, although employees are not required to enroll in that plan to participate in the EBHRA. EBHRAs can reimburse expenses such as fertility medications, IVF, or egg retrieval procedures, subject to the annual EBHRA limit (approximately $2,150 for 2025). This structure allows employers to offer predictable, capped support for fertility expenses without modifying their core medical plan or compromising HSA eligibility.
Specialty HRAs vs. EBHRAs: Key differences and Strategic Considerations
ACA FAQs Part 72 did not change the rules governing EBHRAs, but it has prompted renewed attention to how employers can leverage different HRA structures to support fertility benefits. Employers may be wondering – what is new and why choose one approach over another?
Traditionally, specialty HRAs have been the primary vehicle for reimbursing infertility-related expenses. These HRAs are integrated with the employer’s group health plan and can be designed to cover high-cost services such as IVF, egg retrieval, or fertility medications. Because specialty HRAs are not subject to the EBHRA annual dollar cap, they allow for more generous reimbursement levels. However, they come with more complex compliance requirements, including formal plan documentation and careful coordination with HSA eligibility rules.
EBHRAs, on the other hand, are capped at a lower annual limit (approximately $2,150 for 2025) and are designed to provide modest support for employees who were offered, but may not be enrolled in, the employer’s group health plan. This includes part-time workers, employees covered under a spouse’s plan, or those who opt out of the employer’s coverage. EBHRAs are more simple to administer and do not interfere with HSA eligibility, making them another option for employers seeking broader accessibility and predictable cost control.
Ultimately, the choice between an EBHRA and a specialty HRA depends on the employers’ goals. EBHRAs may be ideal for employers prioritizing reach and affordability, while specialty HRAs are best suited for employers wanting to offer robust, targeted support for fertility and other high-cost health needs.
EAPs Can Include Limited Fertility Support
ACA FAQs Part 72 reaffirms that Employee Assistance Programs (EAPs) may continue to qualify as excepted benefits, provided they do not offer “significant medical benefits.” While the Departments did not define “significant benefits,” longstanding guidance suggests that coverage of medical treatments, such as fertility drugs or procedures, would likely exceed this threshold and disqualify the EAP from excepted benefit status. Employers can still leverage EAPs to provide meaningful, non-clinical fertility support without jeopardizing their compliance status. This may include offering educational resources or navigation support to help employees understand fertility treatment options, locate providers, or explore family building pathways (e.g., access to webinars or printed materials). For employers seeking to gauge employee interest or provide initial support before introducing a full benefit, an EAP based model can serve as an appropriate starting point.
Employer Takeaways
ACA FAQs Part 72 provides employers with expanded flexibility to support fertility care while remaining compliant with federal health plan regulations. Although the guidance does not introduce new rules, it clarifies existing pathways for offering fertility benefits outside of the primary group health plan. Employers should assess their current benefit structure, consult carriers and vendors about insured options, and ensure plan documents and employee communications reflect any new offerings. Whether through insured excepted benefit policies, EBHRAs, or supportive EAP enhancements, employers now have more options to meet employee needs while managing compliance requirements.
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