The Departments of Labor, Health and Human Services, and Treasury recently published proposed regulations aimed at expanding employer-provided access to fertility benefits. The Proposed Regulations implement President Donald Trump’s February 2025 Executive Order 14216, Expanding Access to In Vitro Fertilization, which directed federal government agencies to identify ways to ensure reliable and affordable access to in vitro fertilization (IVF) treatment.  Comments on these proposed regulations are due by July 13, 2026. If finalized, the regulations are expected to become effective for plan years beginning on or after  January 1, 2027.

Background

Currently, employers who wish to offer fertility benefits to their employees generally do so through their primary group health plan as part of their covered medical benefits. Their ability to offer fertility benefits outside of their existing group health plan is limited and triggers a myriad of federal requirements that can create administrative and compliance challenges.  Moreover, existing fertility benefit programs are often limited in the types of care they cover and may exclude certain procedures entirely, resulting in participants incurring significant out-of-pocket costs or electing to forgo the benefits altogether.

To support the implementation of the Executive Order and increase availability, the proposed regulations establish a new pathway for offering standalone fertility benefits as a form of limited excepted benefit, similar to dental and vision benefits, employee assistance programs, and hospital indemnity insurance. Under existing regulations, excepted benefits are exempt from key ACA market reforms and the majority of the portability requirements under HIPAA and certain other federal laws that apply to group health plans. By offering fertility benefits as a standalone excepted benefit, employers would gain greater flexibility (both as to who they offer these benefits to as well as what benefits are offered), simplify administration, and potentially reduce costs associated with ACA and HIPAA compliance.

The Proposed Excepted Fertility Benefit

The proposed regulations broadly define covered fertility benefits to include the diagnosis, mitigation, and treatment of infertility. This broad scope ensures that not only services like in vitro fertilization (IVF) are covered, but also underlying conditions that contribute to infertility.

Specific examples include:

• diagnostic services
• surgical procedures
• fertility education and medical management
• counseling
• medications
• IVF and other assisted reproductive technology

For employers who choose to establish a standalone fertility benefit program, the proposed regulations provide significant flexibility. The requirements for offering a fertility benefit program as an excepted benefit are as follows:

• The benefits must be provided under a separate insurance policy or self-funded plan that is not integrated with the employer’s primary group health plan,
• Substantially all of the benefits must be for the diagnosis, mitigation, or treatment of infertility or infertility-related reproductive health conditions,
• Services must be provided by medical professionals authorized to practice under applicable law,
• Each participant (together with his or her beneficiaries) is subject to a maximum lifetime benefit of $120,000, which will be indexed for inflation beginning in 2028, and
• The employer must provide written notice to participants regarding the benefit.

Next Steps

As an employer, you are not required under the proposed regulations to offer fertility benefits or to change your current offerings.  Instead, the proposed regulations provide a potential new structure to be considered.  As you begin planning for your 2027 benefit program offerings, you may want to consult with your legal counsel and potential providers to explore options that may become available for implementing fertility benefits as a limited excepted benefit and how to structure fertility limited excepted benefits to maximize tax savings.  Also consider whether your state mandates that group health insurance issued in your state provides coverage for certain fertility benefits (almost 20 states have adopted some type of mandate), and what duplication may result.  Finally, discuss with your legal advisors how to minimize any risks associated with excepted benefits, including the risk that potential misclassification of a benefit as excepted may expose an employer to penalties and litigation.

The Nelson Mullins Employee Benefits Group is ready to assist with questions or to discuss your options. Please contact one of our Employee Benefits attorneys or the Nelson Mullins attorney with whom you work.