FAQs About Affordable Care Act Implementation Part 72 (Oct. 16, 2025)
The DOL, HHS, and IRS have issued FAQ guidance (Part 72) clarifying how fertility benefits may be offered as excepted benefits. As background, excepted benefits, which are designed to offer supplemental or limited coverage, are exempt from certain group health plan mandates under HIPAA’s portability rules (e.g., special enrollments), the Affordable Care Act (e.g., age 26 and preventive services mandates, enhanced claims and appeals rules, and annual dollar-limit prohibition), and other laws (e.g., federal mental health parity requirements). Here are highlights of the FAQs:
- Independent, Noncoordinated Excepted Benefits. The FAQs clarify that an employer may offer fertility benefits as an “independent, noncoordinated excepted benefit,” such as a specified disease or illness policy, if the applicable requirements are met—that is, the benefits are offered under a separate insurance arrangement, are not coordinated with any group health plan from the same plan sponsor, and are paid without regard to whether other health coverage applies. The agencies point out that an employer is not required to offer a traditional group health plan for a specified disease or illness policy to qualify as an independent, noncoordinated excepted benefit. An FAQ also notes that because the benefits must be provided under a separate policy of insurance to fit within this exception, the coverage cannot be offered as a self-insured arrangement. The agencies add that individuals are permitted to be enrolled in insurance for a specified disease or illness and still contribute to an HSA, provided they are covered by a high-deductible health plan and do not have any other types of coverage that would disqualify them from contributing to an HSA.
- Limited Excepted Benefits. The FAQs also indicate that under existing regulations, an employer may offer an excepted benefit HRA (EBHRA) that reimburses an employee’s out-of-pocket costs related to fertility benefits as a “limited excepted benefit”—that is, the benefits cannot be an integral part of a group health plan and must comply with the limit on the amount that can be made newly available to each participant for each plan year and other EBHRA qualification rules. In addition, the agencies highlight that an employer may offer benefits for coaching and navigator services to help employees understand their fertility options under an EAP that otherwise qualifies as a limited excepted benefit.
EBIA Comment: Prompted by Executive Order 14216, “Expanding Access to In Vitro Fertilization,” these FAQs largely clarify how employers may use existing categories of excepted benefits to offer fertility benefits. The agencies also advise that they intend to issue future regulations with additional ways that certain fertility benefits may be offered as a type of limited excepted benefit, and they are considering whether to modify the standards under which a supplemental benefit for fertility coverage could satisfy the conditions for an excepted benefit. For more information, see EBIA’s Health Care Reform manual at Section V.F (“Excepted Benefits: Certain Health FSAs, Dental, Vision, and Others”) and EBIA’s Consumer Driven Health Care manual at Sections XI (“HSAs: Other Permissible/Impermissible Types of Coverage”) and XXVIII.C (“Excepted Benefit HRAs (EBHRAs)”).
Take your tax and accounting research to the next level with Checkpoint Edge and CoCounsel. Get instant access to AI-assisted research, expert-approved answers, and cutting-edge tools like Advisory Maps and State Charts. Try it today and transform the way you work! Subscribe now and discover a smarter way to find answers.
