Proposed Rule Would Let Employers Offer Standalone Fertility Benefits

Employers may soon have a new way to help employees access fertility treatments without incorporating those benefits into their primary health plans.

The Departments of Labor, Health and Human Services and the Treasury have proposed regulations that would create a new category of “limited excepted benefits” for fertility treatments under the Affordable Care Act. If finalized, employers could begin offering these benefits in 2027. The proposal is intended to expand access to fertility care while giving employers more flexibility in designing benefit programs.

Like standalone dental and vision plans, excepted fertility benefits would be exempt from many ACA requirements and certain Employee Retirement Income Security Act rules that apply to traditional group health plans.

How the benefit would work

The agencies say the proposal is designed to give employers flexibility to offer fertility benefits for both women and men and to tailor coverage to their workforce’s needs.

Services that may be covered include:

• Diagnostic testing for infertility and reproductive health conditions
• In vitro fertilization
• Intrauterine insemination
• Fertility medications
• Cryopreservation and storage of eggs, sperm or embryos
• Treatment of conditions such as endometriosis, blocked fallopian tubes, diminished ovarian reserve, male factor infertility and other medically recognized infertility conditions

To qualify, a fertility benefit would need to meet several criteria:

• Traditional group health coverage must be offered, although employees would not have to enroll in it.
• The benefit must be under a separate policy, certificate or contract and could not be integrated into the primary group health plan.
• Substantially all benefits must relate to diagnosing, mitigating or treating infertility or infertility-related reproductive health conditions.
• Services generally must be provided by licensed medical professionals.
• The benefit would be subject to a combined lifetime maximum of $120,000 per participant and eligible beneficiary, indexed for medical inflation after 2028.
• Employers would have to provide a clear written notice describing the coverage and explaining that it is an excepted benefit.

Areas under consideration

The agencies are seeking additional input that may shape the final regulations, including:

• Whether the lifetime cap should instead be an annual limit with rollover provisions.
• Whether the proposed $120,000 limit appropriately reflects the cost of fertility treatments.
• Whether employers should be allowed to charge employee premiums, contributions or cost sharing for the benefit, similar to dental and vision plans.
• Whether alternative notice requirements would better inform employees.
• How quickly employers and insurers could implement the new benefit structure.

The takeaway

The public comment period closed July 13, and final regulations could arrive by year-end, allowing employers to begin offering these benefits in 2027.

In the meantime, employers may want to review their current health plan designs, evaluate whether employees are seeking fertility treatments and assess how a standalone fertility benefit could support recruiting and retention goals.

If the rule is finalized, the new option could give employers another tool to provide meaningful family-building benefits while maintaining greater flexibility over plan design and costs.