On May 10, 2026, the DOL, HHS, and Treasury (collectively, the departments) issued proposed rules that would create fertility benefits as a new category of limited excepted benefits. If finalized, the rules would give employers a new way to offer fertility coverage with fewer federal compliance obligations than a major medical plan.
Background
The proposed rules are part of a larger Trump administration effort to make fertility benefits more available and affordable, including by easing unnecessary statutory or regulatory requirements. On February 18, 2025, the president issued an executive order seeking ways to ensure more reliable access to in vitro fertilization (IVF) treatments. Subsequently, the departments released FAQs explaining how employers can offer fertility benefits, including IVF treatments, as excepted benefits, and outlining their intention to propose rules providing additional options for offering fertility benefits as limited excepted benefits. For further details, please review our prior article on the FAQs.
Excepted Benefits
As a reminder, excepted benefits are exempt from certain ACA mandates (e.g., coverage of preventive services without cost-sharing, prohibitions on annual limits for essential health benefits), HIPAA portability requirements (e.g., special enrollment rights), and other group health plan laws (e.g., the No Surprises Act). Accordingly, for employers, structuring benefits as excepted benefits can reduce compliance burdens and related costs. Limited excepted benefits are one type of excepted benefits and include limited-scope vision or dental benefits, health FSAs, certain employee assistance programs (EAPs), and certain HRAs, such as excepted benefit HRAs (EBHRAs).
The Proposed Rules
The proposed rules would establish excepted fertility benefits as a new category of limited excepted benefits. To qualify, the fertility benefits must meet one of the following conditions:
- Be provided under a separate policy, certificate, or contract of insurance (i.e., fully insured coverage).
- Not be an integral part of a group health plan.
To meet the second standard, the employer would generally need to offer group major medical coverage to an employee who is offered the fertility benefits (which could be fully insured or self-insured). However, the employee would not be required to enroll in the medical plan to enroll in the fertility coverage (the second standard is similar to that for health FSAs).
The departments believe this approach aligns with the market reality that fertility benefits are typically not covered under the employer’s major medical plan (unless required by state law). When covered, they are often administered under a separate contract from the medical plan. Additionally, it would allow an employer to offer fertility benefits to employees regardless of whether they are enrolled in the major medical plan.
The proposed rules set other specific requirements for fertility benefits to qualify as limited excepted benefits:
- Scope of Covered Benefits: Substantially all benefits must be for the diagnosis, mitigation, or treatment of infertility or related reproductive health conditions and must be provided by medical professionals authorized to practice under applicable law. The proposal interprets this category broadly enough to include, among other items, diagnostic services, fertility education, medical management, surgical procedures, medications, counseling, and assisted reproductive technology, including IVF.
- Lifetime Dollar Limit: Benefits for the participant and their beneficiaries must be capped at a combined lifetime maximum of up to $120,000, indexed for inflation for plan years starting after 2028. The departments believe this dollar maximum, along with the prescribed scope, will ensure excepted fertility benefits are truly limited, as statutorily required, while allowing employers and insurers the flexibility to offer meaningful benefits, including IVF treatment. The departments further explain that a lifetime (as opposed to annual) limit aligns with how fertility coverage is typically structured.
- Notice Requirements: Employers must provide a notice to eligible individuals prior to enrollment, annually thereafter and upon request, that clearly describes the coverage, including a summary of benefits and limitations, how to identify a network provider, as applicable, and how to submit a claim for reimbursement.
The proposed rules include several helpful examples to illustrate these requirements.
Employer Takeaway
Employers who are considering offering fertility benefits to employees should be aware of the proposed rules, which are primarily designed to reduce some of the compliance burdens associated with such offerings. For employers who already voluntarily offer fertility benefits, the proposed rules may allow the offering to be extended beyond employees enrolled in the major medical plan, if desired, and if certain conditions are met.
However, if the fertility coverage is offered as a limited excepted benefit under a separate insurance policy, the options will depend upon the carrier’s offerings. Moreover, the cost of coverage may remain a significant barrier for many employers. The departments acknowledge the uncertainty regarding premium costs and that risk pools for this type of insurance coverage may be complicated by adverse selection (i.e., participants and beneficiaries who elect to enroll would generally be those already aware of their need to utilize fertility benefits). Accordingly, employers may choose to take a wait-and-see approach before taking steps to introduce or restructure their fertility benefits.
Additionally, the guidance, including the effective date (plan years beginning on or after January 1, 2027), is only proposed at this time and may change significantly prior to finalization in response to public comments received. Comments are requested on various aspects of the proposed rules and can be submitted through July 13, 2026.
NFP will monitor these developments and provide updates in future editions of Compliance Corner.
For additional information regarding the proposed rule, refer to the DOL news release and the Federal Register notice.