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The U.S. Department of Labor (DOL), Health and Human Services (HHS), and Internal Revenue Service (IRS) recently issued FAQs About Affordable Care Act Implementation Part 72. President Donald Trump's Executive Order 14216, "Expanding Access to In Vitro Fertilization," is likely the reason these FAQs were issued.
The purpose of these FAQs is to clarify how employer-sponsored health insurance plans may provide fertility benefits as excepted benefits, which are exempt from certain group health plan requirements under federal laws, including the Health Insurance Portability and Accountability Act (HIPAA) and the Affordable Care Act (ACA). As a result, excepted benefits are those that employer-sponsored health insurance plans may offer on a supplemental or limited coverage basis.
First, the FAQs explain that employers may offer fertility treatment coverage as an "independent, noncoordinated excepted benefit," similar to coverage for a specific disease or illness, such as cancer. However, employers may only offer such coverage if they meet certain requirements, including the following:
- The plan must offer benefits under a separate insurance arrangement;
- The benefits are not coordinated with any group health plan from the same plan sponsor; and
- The benefits are available regardless of whether any other health coverage applies.
The FAQs offer additional clarification on the provision of fertility treatment coverage as an excepted benefit. For example, one FAQ states that an employer need not offer traditional group plan coverage to offer an independent, noncoordinated excepted benefit in the form of a specified disease or illness policy. An excepted benefit is unavailable as a self-insured arrangement. Individuals enrolled in an excepted benefit, such as for a specified disease or illness, also can still contribute to an HSA, as long as they have a high-deductible health plan and have no other type of coverage disqualifying them from HSA contributions.
Furthermore, an employer can offer an excepted benefit HRA (EBHRA) to reimburse out-of-pocket costs related to fertility treatment as a "limited excepted benefit." In other words, the benefits the employer offers: 1) cannot be an integral part of a group health plan; 2) must adhere to the limit on the amount that each participant has newly available for each plan year; and 3) must meet other EBHRA qualification rules.
The FAQs also note that an employer can provide access to an employee assistance program (EAP) that qualifies as a limited excepted benefit to offer coaching and navigator services about available fertility options.
Finally, the agencies' FAQs state that they intend to issue regulations in the future that will advise employers on other ways they can offer certain fertility benefits to their employees as limited excepted benefits. The agencies also noted their intent to consider whether to change the existing standards under which a supplemental fertility benefit can be an excepted benefit.
According to the White House, the overall goal is to expand employers' ability to offer fertility-related coverage for employees and, in turn, help more employees have healthier babies. The FAQs acknowledge that although most women of reproductive age have employer-sponsored insurance, their insurance coverage typically does not cover fertility medications, in vitro fertilization (IVF), or other non-IVF treatments. This lack of coverage is particularly predominant among small and medium-sized employers.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
