Proposed Rule Would Bring Flexibility To Employer Fertility Benefits

On May 10, 2026, the U.S. Departments of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Departments) announced a proposed rule intended to expand access to fertility benefits by creating a new category of limited excepted benefits. The proposed rule builds on President Trump’s February 18, 2025, Executive Order and other guidance issued by the Trump Administration, which identified a goal of making infertility treatment more accessible and affordable. If finalized, the proposed rule would be effective for plan years beginning on or after January 1, 2027.

A significant number of employer-sponsored major medical plans do not offer fertility benefits or only cover a limited scope of infertility services. In vitro fertilization (IVF) and other infertility services are expensive, with HHS estimating a cost of $10,000-$20,000 for a single IVF cycle.¹ The high cost places infertility services out of reach for many Americans. The proposed rule seeks to change this by providing more flexibility for employers seeking to offer fertility benefits to their employees.

Under existing law, offering a carve-out fertility benefit plan is subject to compliance hurdles. Group health plans are generally subject to specific requirements under the Patient Protection and Affordable Care Act (ACA) and other federal laws (market reform requirements). For example, the ACA requires group health plans to provide coverage for certain preventive services. A plan providing limited coverage for a specialized benefit (like fertility benefits) is not able to meet the market reform requirements on a standalone basis.

However, certain types of health benefit plans, known as excepted benefits, are generally excluded from these market reform requirements (e.g., accident-only, hospital indemnity, and certain dental and vision coverage, etc.). The proposed rule would add fertility benefits as a type of excepted benefit that does not need to meet market reform requirements.

Under the proposed rule, for a fertility benefit plan to qualify as a limited excepted benefit, it must:

• If insured, be provided under a separate policy, certificate, or contract of insurance from major medical coverage;
• If self-insured, be offered only to employees who have been offered both traditional major medical coverage and the fertility benefit plan by the plan sponsor. The employee is not required to be enrolled in the plan sponsor’s major medical coverage to enroll in the fertility benefit plan;
• Be limited to benefits substantially all of which are for the diagnosis, mitigation, or treatment of infertility or infertility-related reproductive health conditions and substantially all of which are provided by medical professionals authorized to practice under applicable law;
• Have a total lifetime benefit of no more than $120,000 per participant (including dependents) (indexed for inflation); and
• Provide a notice containing specific information to participants that serves as a “quick reference guide” for the benefit.

If finalized, the proposed rule would provide a compliant path for employers that desire to offer fertility benefits to their employees on a carve-out basis. The comment period for the proposed rule ends on July 13, 2026. The Departments have expressly requested input on whether the rule should take immediate effect (rather than a January 1, 2027, effective date), the amount of the lifetime limit, whether the limit should instead be an annual limit, and other comments or data that may provide insight into potential fertility benefit plan design and utilization.

Footnote

1. https://us.pagefreezer.com/en-US/wa/browse/0a7f82bb-be6e-448a-ae11-373d22c37842?find-by-timestamp=2025-01-02T05:49:59Z&url=https:%2F%2Fwww.hhs.gov%2Fabout%2Fnews%2F2024%2F03%2F13%2Ffact-sheet-in-vitro-fertilization-ivf-use-across-united-states.html&timestamp=2025-01-02T07:03:02Z

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