The Departments of Treasury, Labor, and Health and Human Services recently proposed a new rule that would allow employers to offer standalone fertility benefits as a limited excepted benefit beginning with plan years starting on or after January 1, 2027.
The proposal supports Executive Order 14216, “Expanding Access to In Vitro Fertilization,” and is intended to reduce compliance burdens while expanding access to fertility treatments such as IVF.
What Would Change?
Today, fertility benefits are generally offered through a traditional medical plan or integrated “bolt-on” arrangement, meaning they must comply with the full range of group health plan requirements, including the ACA, Mental Health Parity rules, and the No Surprises Act.
If finalized, the new rule would allow employers to offer fertility benefits separately as a limited excepted benefit, similar to stand-alone dental or vision coverage.
This could give employers greater flexibility to design fertility benefits without the same level of regulatory complexity.
What Could Be Covered?
The proposed expected fertility benefit could include:
- Fertility testing and diagnostics
- IVF and other assisted reproductive technology (ART)
- Fertility medications and procedures
- Treatment for infertility-related conditions such as PCOS, endometriosis, or fibroids
- Male infertility treatment
- Fertility counseling and education
The proposal does not include abortion-related services or coverage for surrogacy expenses.
Key Requirements
To qualify as an excepted benefit, the fertility coverage would need to meet several conditions, including:
- The benefit must be offered separately from the medical plan
- Employees cannot be required to enroll in the employer’s medical plan to access the fertility benefit
- The employer must still offer a traditional group health plan
- Most services must relate to infertility treatment and be provided by licensed medical professionals
- The benefit cannot exceed a proposed $120,000 lifetime limit per participant
Why This Matters
If finalized, the rule could make it easier for employers to offer meaningful fertility coverage while reducing compliance obligations tied to traditional group health plans.
As an excepted benefit, the coverage would generally be exempt from many federal requirements such as:
- Affordable Care Act (ACA) mandates
- Mental Health Parity requirements
- No Surprises Act requirements
- HIPAA portability rules
- Certain other federal group health plan mandates
However, some rules would still apply, including ERISA, COBRA, HIPAA privacy and security, and applicable state insurance laws.
Employer Considerations
Employers should begin evaluating whether a standalone fertility benefit aligns with their workforce needs and overall benefits strategy. Organizations currently offering fertility coverage through their medical plan may want to assess whether a separate excepted benefit arrangement could provide greater flexibility in the future.
The proposed rule is currently open for public comment, and a final rule is expected before the 2027 plan year.
Important Reminder
If a fertility benefit arrangement does not meet the proposed requirements, it would be treated as a traditional group health plan and become subject to the full range of ACA, HIPAA, and other compliance requirements, potentially resulting in significant penalties for noncompliance.