Expanded Fertility Coverage in CA – Changes to CA Group Health Plans

In late September of 2024, Governor Newsom signed SB 729 into law. The law is designed to reduce financial barriers that come with fertility treatment by requiring small and large group health plan contracts and policies to provide coverage for the diagnosis and treatment of infertility and fertility services.

Background

Some group health plan contracts cover infertility only to the extent of diagnosis of an underlying medical reason. Governor Newsom’s press release noted that he is a founding member of the Reproductive Freedom Alliance, and his signing of SB 729 is a result of failed federal efforts to expand infertility coverage.

CA joins several states, including CO, CT, and NY that require group health plans to cover IVF.

What is it?

SB 729 requires large and small group health insurance contracts and disability insurance policies (only those that cover medical, surgical or hospital benefits) to provide coverage for up to a maximum of three completed oocyte retrievals (aka IVF) related to infertility. Although, the terms of which coverage must be offered differs as noted below.

Large group contracts must provide coverage for the diagnosis and treatment of infertility and fertility services. This includes up to three oocyte retrievals with unlimited embryo transfers based on guidelines from the American Society for Reproductive Medicine (ASRM), using single embryo transfer when appropriate.

Small group contracts must offer coverage for infertility and fertility services but are not required to provide coverage as a standard benefit.

Health plan contracts are prohibited from imposing stricter conditions (like deductibles or co-pays) for fertility services than those applied to other medical services.

Notably, the bill does not apply to religious employers as defined in Section 1367.25.

Which health plans must comply?

All CA group health plans with an exception for religious employers as described in the text of SB 729.

Note: Small group health insurers/carriers must offer coverage to its customers, but it’s not required to be included in small group health plan contracts.

The new law does not apply to self-insured medical plans or Medi-Cal plans.

When is it effective?

Plans issued, amended or renewed on or after July 1, 2025 – except for CalPERS.

Example: A group health plan that renews starting 8/1/25 must cover infertility as described starting 8/1/25.

The effective date for a CalPERS plan is July 1, 2027.

Are employers that sponsor a health plan required to notify their employees of this change?

SB 729 does not require employers to notify their employees of this change; however, ERISA requires group health plans to distribute a summary of material modifications (SMM) whenever there is a change with regards to the contents in the SPD. The SMM must be distributed within 210 days of the adopted change.

What should employers do next?

If its group health plan is subject to CA SB 729, the employer should issue the SMM to plan participants within 210 days of the start or renewal of your health insurance policy in 2025.

Summary

CA passed a law that expands fertility/infertility coverage for all CA group health plans with an exception for religious employers. Employers with a CA group health plan, excluding CalPERS, that renews on or after 7/1/2025 should expect their insurance carriers to comply with SB 729 and update policy language to reflect the expanded coverage required.

For more information, contact your benefits broker or the insurance carrier directly.

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information. This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.

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