New Regulation for Fertility Benefits in U.S. Employers' Health Plans

Three federal agencies are introducing a new regulation permitting U.S. employers to offer in vitro fertilization (IVF) and fertility-related benefits as standalone options, featuring a lifetime cap of $120,000. Announced on May 13, 2026, this regulation provides employers with a flexible approach to cover various fertility services including IVF diagnostics, medications, and reproductive health treatments.

This initiative, a collaboration between the Treasury Department, the Department of Labor, and the Department of Health and Human Services, aims to classify fertility benefits as "limited excepted benefits." This categorization would exempt these benefits from certain market rules associated with group health plans under ERISA, the Affordable Care Act, and the Public Health Service Act, similar to exemptions already in place for dental, vision, and long-term care benefits.

The proposed rule responds to Executive Order 14216, signed in 2025, prioritizing expanded IVF access. To qualify as excepted, plans must meet specific criteria: they must primarily cover fertility diagnostics or treatments by licensed professionals, feature a lifetime cap of $120,000 adjustable for inflation post-2027, be separate from the primary health plan, and provide employees with annual written notices detailing benefit information in an accessible format.

This regulation could impact approximately 522,811 group health plans and around 54.4 million employees, with projected enrollments reaching 743,361 annually. These numbers align with data indicating that about 3 percent of individuals aged 25 to 45 seek medical assistance to conceive. The proposal addresses coverage gaps, as reports suggest only 27 percent of large firms offer IVF coverage, while nearly 60 percent of employers provide no fertility benefits.

Human resources departments are afforded flexibility under the new rule. Employers are not obligated to offer these benefits, set minimum levels of coverage, or subsidize premiums. Self-insured plans, not restricted by state IVF mandates, may gain significant flexibility, although fully insured plans in states with mandates could encounter different constraints.

The regulation is set to be effective for plan years commencing on or after January 1, 2027, though earlier implementation is under discussion. HR professionals must evaluate whether to initiate fertility benefits, segregate existing coverage from primary plans, and consider risks of adverse selection.

Public comments are invited until July 13, 2026, concerning participation rates, contribution levels, and benefit cap structures. While still a proposal, strategic planning is vital, as companies' design choices will critically influence their benefits offerings.