Recently, the Departments of Labor, Health and Human Services, and Treasury jointly issued a proposed rule designed to expand access to employer‑provided fertility benefits, including coverage for in vitro fertilization (IVF). The proposal introduces a new regulatory pathway that could significantly reshape how employers structure reproductive health benefits.
New Category of “Excepted Benefits” for Fertility Coverage
The proposed rule would create a new category of limited “excepted benefits” specifically for fertility and reproductive health services.
Excepted benefits are generally exempt from certain requirements under the Affordable Care Act (ACA) and other federal group health plan mandates. By placing fertility benefits in this category, the rule would:
- Allow employers to offer fertility coverage outside traditional major medical plans; and
- Reduce regulatory barriers that may currently limit employer adoption of such benefits.
Key Requirements for Covered Benefits
To qualify under the proposed framework, employer‑sponsored fertility benefits would need to meet specific criteria, including:
- Coverage must be primarily for the diagnosis, mitigation, or treatment of infertility or related reproductive conditions;
- Benefits would be subject to a lifetime maximum cap of $120,000 per participant (and beneficiaries), indexed for inflation after 2028; and
- Employers must provide a clear written notice describing the scope and limits of the fertility benefits offered.
These conditions are intended to balance expanded access with defined limits on employer liability and plan design.
Potential Impact on Employer Benefit Design
If finalized, the rule would create new flexibility for employers by:
- Allowing fertility benefits to be offered separately from core health plans, potentially simplifying plan administration;
- Enabling employers to provide targeted reproductive health support without triggering full ACA compliance requirements; and
- Expanding options for employers seeking to enhance family‑forming benefits as part of recruitment and retention strategies.
At the same time, employers would need to carefully structure these offerings to meet the regulatory criteria and disclosure obligations.
Policy Context and Objectives
The proposal is part of a broader federal effort to expand access to fertility care, particularly in light of:
- Limited existing coverage for fertility treatments in employer‑sponsored plans; and
- Ongoing concerns about affordability and access to IVF and related services.
The agencies have indicated that the rule is intended to address gaps in coverage while supporting family formation and workforce participation.
Comment Period and Next Steps
The rule is currently in the proposal stage, and stakeholders have 60 days from publication in the Federal Register to submit public comments.
As a result, the proposal may be modified before being finalized, and its ultimate scope and requirements remain uncertain.
Employer Takeaway
Although not yet finalized, the proposed rule signals a potential shift in how employers can structure and deliver fertility and reproductive health benefits.
Employers should consider:
- Evaluating current benefit offerings to identify gaps in fertility coverage;
- Monitoring regulatory developments and preparing to assess new plan design options; and
- Coordinating with benefits advisors to understand compliance requirements and cost implications if the rule is finalized.
The proposal reflects growing regulatory attention on reproductive health benefits and may create new opportunities—along with new compliance considerations—for employer‑sponsored health plans.