ACA rules on fertility benefits and HSAs

On Oct. 16, 2025, the Departments of Labor, Health and Human Services, along with the Treasury released new guidance titled FAQs About Affordable Care Act Implementation Part 72. The update explains how health benefit arrangements, including fertility-related benefits, can qualify as “excepted benefits” under the Affordable Care Act (ACA), also known as Obamacare. For tax professionals working with employers, this new guidance provides valuable insights into how benefit design impacts compliance, tax treatment and reporting.

What are excepted benefits

If you work with benefit plans, you’ve probably heard the term “excepted benefits.” These are specific types of coverage that are exempt from most ACA market reform requirements. Under the ACA there are four main categories of excepted benefits:

• The first includes benefits that aren’t considered health coverage, like workers’ compensation or auto liability insurance. 
• The second covers limited benefits such as stand-alone dental or vision plans, as long as they meet certain conditions. 
• The third category includes independent, noncoordinated benefits such as specified disease or hospital indemnity policies, which must be offered under a separate policy and cannot be tied to another plan.
• The fourth category includes supplemental coverage like Medicare supplement (Medigap) or TRICARE supplemental policies. 

Part 72 doesn’t create new types of excepted benefits. Instead, it clarifies how employers can design certain offerings, especially fertility and family-building benefits, under these existing categories.

Fertility benefits and the ACA

One of the most talked-about updates in Part 72 involves fertility benefits. Many employers want to support family-building options without getting caught up in the full ACA rules that apply to group health plans. Fertility-related coverage can qualify as an independent, noncoordinated excepted benefit if it meets specific conditions. 

To qualify, the benefit must be offered under its own insurance policy, certificate or contract, and it cannot be coordinated with the main health plan. The coverage cannot be self-funded. 

For employees, this is good news. The guidance makes it clear that workers who are covered by this kind of fertility benefit can still contribute to a health savings account (HSA) as long as they’re otherwise eligible under a high-deductible health plan. This point is especially important for employers who want to support fertility care while keeping HSA options open for employees.

Health reimbursement arrangements and employee assistance programs

Part 72 also clears up how health reimbursement arrangements (HRAs) and employee assistance programs (EAPs) fit into the picture. 

An HRA can qualify as a limited excepted benefit if it reimburses specific out-of-pocket fertility expenses and meets the established requirements for limited coverage. 

For EAPs, the rules say that to remain an excepted benefit, the program can’t provide significant medical care. An employer could offer fertility coaching or navigation services through an EAP, as long as it focuses mainly on education or referrals, rather than actual medical treatment. From a tax perspective, that means employer-funded fertility coaching through an EAP generally wouldn’t be considered taxable medical coverage if it meets these conditions.

Tax and compliance considerations

Even though excepted benefits are free from many ACA mandates, employers still have to follow certain rules to maintain that status. Employers should be aware that excepted benefits must be separate from the main health plan and not coordinated with it. Self-funded fertility benefits won’t qualify as independent excepted benefits. HRAs and EAPs must meet specific structural requirements to maintain their status, and employees enrolled in qualifying excepted benefits can still maintain HSA eligibility. For tax professionals, understanding those details helps ensure accurate reporting and proper treatment of benefit costs. From a tax compliance standpoint, these factors affect employer deductions, year-end wage statement reporting and ACA information reporting, and overall payroll tax considerations.

Additional guidance is likely to come in the future

There are plans to further refine how fertility and other specialized benefits are handled under the ACA. That could include revisiting safe-harbor limits or clarifying valuation rules for supplemental coverage. For now, Part 72 provides the most current and detailed guidance available. Employers that already offer or are considering fertility benefits should review their plan structures now to ensure compliance with ACA, ERISA and tax code requirements. Working closely with benefits counsel and tax advisors can help identify any needed updates before year-end reporting or open enrollment periods.

How tax professionals can use this guidance

For tax professionals, this update opens the door to more meaningful conversations with employer clients. You can help review their benefit plans for ACA compliance, confirm that HSA eligibility remains intact and ensure that new benefit offerings align with tax reporting rules. You can also guide employers through deductibility questions and coordinate with HR teams to manage communication about new benefits. As fertility and other specialized benefits become more common, staying up to date on how they’re treated under the ACA will help you provide smarter, more practical advice.