Proposed Fertility Benefit Rules Expand Employer IVF Options

Proposed Rules Aim to Expand Employer Fertility Benefit Options

Federal agencies have proposed new rules that could make it easier for employers to offer fertility-related benefits, including in vitro fertilization (IVF), outside of a traditional major medical plan.

In response to the Executive Order, “Expanding Access to In Vitro Fertilization,” the Departments of Labor, Health and Human Services, and Treasury issued proposed regulations that would create a new category of limited-scope excepted benefits for fertility care.

If finalized, the rules would apply to group health plans and health insurance issuers in the group market for plan years beginning on or after January 1, 2027.

Why This Proposal Matters for Employers

Excepted benefits are a special category of benefits that are generally exempt from several major federal health plan requirements when they meet applicable rules. These exemptions may include certain Affordable Care Act market reforms, annual and lifetime dollar limit restrictions, cost-sharing limits, Mental Health Parity requirements, and some No Surprises Act protections.

Until now, employers looking to provide fertility support outside of a comprehensive medical plan had limited options. In ACA FAQ Part 72, issued in October 2025, the Department of Labor outlined possible ways employers could structure fertility-related benefits as excepted benefits, including:

• Independent, non-coordinated benefits, such as specified disease policies

• Excepted benefit health reimbursement arrangements

• Employee Assistance Programs that do not provide significant medical care

While helpful, these options were often narrow, administratively complex, or limited in the level of fertility care they could support.

Fertility Benefits as a New Limited-Scope Excepted Benefit

The proposed regulations would formally add fertility benefits to the existing list of limited-scope excepted benefits, which currently includes dental, vision, and long-term care benefits.

This change would give employers a clearer framework for offering fertility care as a stand-alone or separate benefit, rather than only through a major medical plan. However, the benefit would need to satisfy both existing limited-scope benefit rules and new fertility-specific requirements.

Key Requirements Under the Proposed Rules

To qualify as an excepted fertility benefit, the arrangement would need to meet several conditions.

1. Coverage Must Focus on Fertility and Reproductive Health Care

The benefit must satisfy a “substantially all” standard. This means substantially all covered services must relate to the diagnosis, mitigation, or treatment of infertility or underlying reproductive health conditions.

Covered services must also be medically appropriate and provided under the direction of a licensed medical professional.

Examples of eligible fertility-related services may include:

• Infertility diagnostic procedures, such as testing for endometriosis

• Ovulation induction medications

• Evaluation and treatment of male factor infertility

• IVF cycles, subject to employer plan design and cost limits

• Fertility awareness methods and preconception care

• Fertility education or counseling when part of a medically directed program

This standard is designed to keep the benefit focused on fertility care while allowing employers flexibility in how the benefit is structured.

2. Coverage Must Be Separate From the Major Medical Plan

The fertility benefit must be offered separately from the employer’s primary group health plan. This could be done through a separate insurance policy, certificate, or contract.

For self-insured employers, the benefit would generally need to be administered separately or offered through a separate election process so that it is not treated as an integral part of the main group health plan.

This separation requirement is important because limited-scope excepted benefits must remain distinct from comprehensive medical coverage.

3. A Lifetime Benefit Maximum Would Apply

The proposed rules would allow a lifetime fertility benefit maximum of up to $120,000 per participant, including eligible dependents or beneficiaries. The limit would be indexed in future years.

One area that may need additional clarification is whether the lifetime limit applies separately to each plan or across all fertility benefits available to an individual.

Employers considering this benefit should monitor future agency guidance before finalizing plan design decisions.

4. Participants Must Receive a Separate Notice

Employers would also need to provide a stand-alone notice explaining the fertility benefit.

The notice would need to describe the availability, scope, and limits of the coverage. It would generally need to be provided:

• During enrollment, including open enrollment

• To newly eligible individuals by the first day they become eligible

• Each year after initial enrollment

This notice requirement is intended to help employees understand what fertility services are covered, what limitations apply, and how the benefit works.

Employer Compliance Considerations

Although the proposed rules may create new flexibility, employers should carefully review how a fertility benefit would interact with other federal and state requirements.

HSA Compatibility

The proposal does not clearly address how excepted fertility benefits would affect Health Savings Account eligibility. Under current IRS rules, certain limited-scope benefits are often treated as permitted coverage for HSA purposes. However, additional IRS guidance would be helpful to confirm whether the same treatment would apply to fertility benefits.

COBRA Requirements

Because fertility benefits may involve significant medical care, employers should evaluate whether the benefit would be subject to COBRA continuation coverage requirements. A stand-alone design does not automatically remove all compliance obligations.

State Fertility Coverage Mandates

Employers with fully insured plans in states that mandate fertility or IVF coverage should review whether a separate excepted benefit arrangement satisfies state law. Coordination issues may arise when fertility coverage is provided both under a medical plan and a separate fertility benefit.

ERISA Reporting and Disclosure

Even if structured as an excepted benefit, a fertility benefit may still be subject to ERISA. Employers should consider plan document requirements, summary plan descriptions, Form 5500 reporting, claims procedures, fiduciary obligations, and other disclosure rules.

What Employers Should Do Next

Employers interested in offering IVF coverage or broader fertility benefits should begin evaluating their options now, especially if they want to implement a new benefit for the 2027 plan year.

Key next steps include:

• Reviewing current medical plan fertility coverage

• Identifying applicable state fertility mandates

• Evaluating insured versus self-insured fertility benefit options

• Considering how the benefit would interact with HSA eligibility

• Preparing for notice, ERISA, COBRA, and claims administration requirements

• Monitoring final regulations and future agency guidance

Bottom Line

The proposed fertility benefit rules could give employers a more practical way to offer meaningful fertility and IVF support outside of a traditional group health plan. If finalized, the rules would expand employer flexibility while creating specific design, notice, and compliance requirements.

Employers should continue monitoring regulatory updates and work with benefits advisors, legal counsel, and carriers or third-party administrators before implementing a fertility benefit arrangement.