On May 13, 2026, the Departments of Treasury, Labor, and Health and Human Services jointly published proposed regulations that would establish a new category of “limited excepted benefits” for fertility-related coverage under Employee Retirement Income Security Act of 1974 (ERISA), the Internal Revenue Code, and the Public Health Service Act. If finalized, these rules would create a streamlined pathway for employers to offer separate fertility coverage (on an insured or self-insured basis) to employees who are not otherwise enrolled in the employer’s primary group health plan. The fertility “excepted benefits” would be generally exempt from Affordable Care Act’s mandates (such as requirements to cover certain preventive care services), HIPAA portability rules, the No Surprises Act, and certain other federal mandates that apply to traditional group health plans. If finalized, the regulations would be effective for plan years beginning on or after January 1, 2027.
What the Proposed Rules Would Do
The proposed regulations would permit employers to offer fertility benefits — covering diagnosis, mitigation, or treatment of infertility or infertility-related reproductive health conditions — as a standalone insured or self-insured benefit separate from major medical coverage. Covered services could include diagnostic lab tests, imaging, hormone panels, in vitro fertilization (IVF), intrauterine insemination (IUI), fertility medications, surgical procedures, and preconception care.
Key Conditions to Qualify
To qualify as excepted benefits, the proposed rules would require the fertility benefit to meet four conditions:
- Scope limitation: Substantially all benefits must be for the diagnosis, mitigation, or treatment of infertility or infertility-related conditions and be provided by licensed medical professionals.
- Lifetime dollar cap: Total lifetime benefits per participant (together with eligible beneficiaries) may not exceed $120,000, indexed for medical inflation beginning for plan years after December 31, 2027. However, the employer may still cover fertility benefits in excess of the lifetime dollar limit through its traditional group health plan — these proposed rules do not prohibit coordination between the two plans.
- Not an integral part of the plan: The benefit must either be provided under a separate policy, certificate, or contract or insurance or on a self-insured basis. If provided on a self-insured basis, the employer must also offer a traditional group health plan (i.e., not a health reimbursement arrangement or other account-based group health plan) to the same employees, though employees who enroll in the fertility benefit do not have to enroll also in the traditional group health plan.
- Written notice: Plans must provide participant-friendly written notice describing coverage, limitations, claims procedures, and network information (including how to identify and utilize a network provider), delivered at or before enrollment eligibility and annually thereafter.
Other Options for Offering Fertility Coverage
The proposed rules are intended to give employers another option for offering fertility benefits to their employees, especially to employees who do not enroll in an employer’s primary group health plan. The proposed rules augment guidance that the agencies issued in October 2025 clarifying that fertility benefits (1) can be offered under a separate insurance arrangement, such as a specified disease or illness policy, that is not coordinated with any other group health plan offered by the employer; or (2) through an excepted benefits health reimbursement arrangement (HRA) that reimburses an employee’s out-of-pocket costs related to fertility benefits up to a dollar limit ($2,200 for 2026).
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