Proposed Regulations on Excepted Fertility Benefits: What Employers Need to Know

In May 2026, the U.S. Departments of Labor, Health and Human Services, and the Treasury issued proposed regulations termed "Excepted Fertility Benefits." These rules aim to clarify how fertility benefits might be treated as “excepted benefits.” The proposals align with earlier guidance, such as the "FAQs about Affordable Care Act Implementation Part 72," and a 2025 executive order advocating policy protections for fertility treatments, including IVF.

Currently, many employer-sponsored health plans do not include fertility benefits within their major medical offerings. As a result, plan sponsors often seek alternatives, like integrating fertility benefits with ACA-compliant Health Reimbursement Arrangements (HRAs) or offering these benefits through separate programs via third-party vendors.

There was prior uncertainty about the compliance of stand-alone fertility benefit programs under federal regulations. However, FAQ Part 72 clarified that fertility benefits could be structured as excepted benefits, either as a noncoordinated or limited category. The newly proposed rules specify how these benefits may qualify as limited excepted benefits, effective for plan years beginning January 1, 2027, pending finalization.

Under existing regulations, excepted benefits—such as dental or vision coverage—are exempt from many requirements applying to major medical plans. This includes ACA provisions that prohibit lifetime or annual dollar limits on essential health benefits and mandate preventive care at no cost. The current proposals suggest including fertility benefits as limited excepted benefits, allowing employers more flexibility in offering these benefits outside major medical coverage constraints.

The proposals require that these benefits predominantly address infertility or related reproductive health issues, provided by licensed professionals. Coverage may include preventive and treatment services, excluding abortion services. A lifetime dollar cap of $120,000, adjustable annually for inflation, is proposed for these benefits.

To qualify, the benefits must not be integral to the health plan, meaning they must be provided separately or under a distinct insurance contract. While linked to major medical plans, employees need not be enrolled in the primary health plan to access fertility benefits. Employers may also require employee contributions towards fertility coverage, provided notice complies with applicable distribution standards, including potential electronic delivery subject to ERISA compliance.

Organizations considering fertility benefit offerings outside of standard medical coverage should review the finalized rules once issued to ensure compliance with excepted benefit criteria. While these regulations expand fertility coverage, they must adhere to other group health plan regulations like ERISA and COBRA. Employers with health savings accounts (HSAs) must consider the potential impact on HSA eligibility if fertility benefits offer coverage before deductibles are met, except where services qualify as preventive.

For ongoing updates on the finalization and implementation of these rules, industry stakeholders are encouraged to stay informed through professional advisories and regulatory updates.