jocole says:
sewing around the edges of whatever you plan to iron on would make the edges inaccessable and therefore make the item compliant
........
I think this is correct. As long as both materials are exempt and the glue is inaccessible it would be exempt from testing. Otherwise, even if the iron-on company says it's lead & phthalate-free, you still have to test the final product. (The good news is it would pass, but you still have to do it.) Sadly, not all iron-ons pass the lead test. (I don't know about the glue, the problem is with the ink.)