Proposed Rule: Excepted Fertility Benefits

The Departments of Labor, Health and Human Services, and Treasury recently issued proposed regulations that would establish a new category of “excepted benefits” for certain fertility-related services offered through employer-sponsored health plans. If finalized, the rules would apply for plan years beginning on or after January 1, 2027. The proposal would allow qualifying fertility benefits to be offered outside of comprehensive major medical coverage and exempt them from many ACA, HIPAA, and other compliance requirements, with the stated goal of reducing regulatory barriers and expanding access to services such as IVF, fertility medications, fertility preservation, and related reproductive health treatments.

The proposed rule builds on the agencies’ October 2025 FAQ guidance, which clarified that employers could already structure certain fertility benefits through existing excepted-benefit arrangements, such as excepted benefit HRAs, limited EAPs, and independent non-coordinated coverage. The new proposal creates a dedicated framework for fertility benefits and establishes four primary requirements for coverage to qualify as an excepted benefit: (1) the fertility coverage must either be insured or otherwise “not an integral part” of the employer’s group health plan; (2) substantially all covered services must relate to the diagnosis, mitigation, or treatment of infertility or infertility-related reproductive health conditions and generally be provided by licensed medical professionals; (3) the benefit must be subject to a $120,000 lifetime maximum (indexed for medical inflation); and (4) plans must provide a written notice describing the fertility coverage, limitations, provider access, and claims procedures.

Employers interested in expanding fertility offerings, carving out stand-alone fertility programs, or reducing compliance complexity may want to begin evaluating how their current programs align with the proposed framework and whether alternative benefit structures could become more feasible under the new rules, while continuing to closely monitor the rulemaking process and any changes made as the agencies move toward final regulations.