No Longer an Exception to the Rule: Fertility Benefits Can Be Offered as an Excepted Benefit

Fertility-related benefits help ease the stress and financial pressures employees experience associated with family planning, and aid employers in attracting and retaining top tier talent. As a result, the number of employers—particularly large employers—offering fertility-related benefits has dramatically increased over the past five years. In 2024, more than 40% of U.S. employers offered some form of fertility-related benefits—including fertility medications, in vitro fertilization (“IVF”), and genetic testing. In October, the Departments of Treasury, Health and Human Services, and Labor (collectively, “Departments”) issued FAQs about Affordable Care Act Implementation Part 72 (“FAQs”), clarifying how employers can offer fertility benefits as an “excepted benefit.”

Currently, employer sponsored fertility-related benefits are often offered in connection with the employer’s existing group health plan which are subject to the Affordable Care Act (“ACA”) and the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). Prompted by Executive Order 14216 and the subsequent recommendations by the Assistant to the President for the Domestic Policy Council, the Departments issued the FAQs. The FAQs explain three ways employers may provide fertility benefits using the existing categories of excepted benefits which—unlike employer’s group health plans—are not subject to the ACA’s mandates (e.g., lifetime and annual limits), HIPAA’s portability requirements, and other federal rules.

Options for Excepted Fertility Benefits

1. Independent, Noncoordinated Excepted Benefit

The FAQs make it clear that employers may offer a specified disease or illness policy which covers infertility as an independent, noncoordinated excepted benefit if it is:

• Provided through a separate policy, certificate, or contract of insurance;

• There is no coordination of the fertility benefit and any exclusion of benefits under the employer’s group health plan; and

• The fertility benefits are paid without regard to the employer’s group health plan.

  
  

Employees are not required to enroll in the employer’s group health plan in order to enroll in its independent, noncoordinated fertility benefit plan. Further, though self-funded arrangements cannot currently qualify as independent, noncoordinated benefits, the Departments intend to address how certain fertility benefits may be offered as permissible limited excepted benefits in future proposed rulemaking.

2. Limited Excepted Benefit Health Reimbursement Arrangement (“HRA”)

Pursuant to final rules issued in 2019, the FAQs explain HRAs that satisfy the following conditions are considered “limited excepted benefits”:

• Other group health plan coverage that is not limited to excepted benefits and is not an HRA or other account-based group health plan is made available to the employee by the employer for the plan year;

• The amount available under the HRA for the plan year does not exceed $2,150 in the 2025 plan year (indexed for inflation);

• The HRA does not reimburse premiums other than premiums for coverage that consists solely of excepted benefits; and

• The HRA is made available on the same terms to all similarly situated individuals—regardless of any health factor.

  
  

If an HRA meets the foregoing requirements, it can be offered to reimburse employees’ out-of-pocket costs for fertility benefits.

3. Certain Employee Assistance Programs 

Finally, employers may offer benefits for coaching and navigator services to help employees (and their dependents) understand fertility options under an employee assistance program (“EAP”) which qualifies as a limited excepted benefit. To qualify, an EAP must not:

• Provide significant benefits in the nature of medical care;

• Be coordinated with benefits under another group health plan;

• Require employee premiums or contributions as a condition to participate; or

• Require any cost sharing.

  
  

The FAQs explain an EAP will not be deemed to provide significant benefits “in the nature of medical care” if it offers benefits for coaching and navigator services to help individuals understand their fertility options.

Takeaways for Employers

While the FAQs do not change any existing rules governing fertility-related benefits, and from a practical perspective will not likely change how most employers currently structure these benefits, they do illustrate the increasing attention these benefits are attracting. Presently, nearly half of states have passed fertility related insurance coverage laws, and the federal government has expressed its commitment to expanding access to affordable fertility treatments. Given the value placed on fertility benefits by employees, employers, and lawmakers alike, we anticipate the landscape surrounding them will continue to evolve.

If you have any questions regarding how to improve the fertility-related benefits currently offered to your employees or to discuss how to implement new types of benefits, please reach out to your Boutwell Fay LLP attorney.