Administration Proposes Rule to Expand Employer Fertility Benefits

Action: On May 10, the Department of Labor (DOL) issued a proposed rule jointly with the Departments of Health and Human Services and Treasury to establish a new category of “limited excepted benefits” for fertility-related services, so employers may offer fertility benefits, including in-vitro fertilization (IVF)-related coverage, separately from major medical plans. This is part of the Administration’s effort to expand access to IVF, support family formation, and reduce regulatory barriers for employer-sponsored benefits.¹

Trusted Insights for What’s Ahead^®

• The proposed rule would add fertility as a new category of limited excepted benefits, similar in structure to standalone dental and vision coverage. This would allow employers and issuers to offer qualifying fertility coverage separately from major medical coverage and outside many Federal health plan requirements that apply to comprehensive health insurance (which currently do not require fertility benefits, although plans for Federal employees have some drug benefits).²
• This proposal follows Executive Order 14216, “Expanding Access to In Vitro Fertilization,” and reflects the Administration’s effort to expand employer benefit flexibility. The new category would cover services substantially focused on diagnosis, mitigation, or treatment of infertility or related reproductive health conditions, including IVF, non-IVF fertility services, diagnostics, counseling, medications, surgical treatments, and services addressing underlying causes of infertility.³
• Under the proposal, benefits would be capped at a combined lifetime maximum of $120,000 per participant, together with eligible beneficiaries, with indexing for medical inflation for plan years beginning after 2027. Plans or issuers would also have to provide a written notice explaining coverage, limits, provider access, and claims procedures.⁴
• State fertility coverage requirements are expanding but remain uneven: the proposed rule cites 23 states and the District of Columbia as requiring some fertility-related coverage in private insurance, and 15 states and the District of Columbia as requiring some IVF coverage.⁵ Those requirements generally apply to state-regulated insurance policies, while many large employer health plans are regulated under Federal benefits law, making the proposal especially relevant for employers seeking a consistent fertility benefit across multiple states.
• Under the rule, DOL would require employers to offer a traditional health plan to employees offered the fertility benefit, but employees would not have to enroll in that plan to receive the benefit. Fertility benefits would operate more like standalone dental or vision coverage than mental health coverage, which is typically part of regular health insurance.
• What this means for business: Comments on the proposal are due July 13. While the proposal would not require employers to offer fertility coverage, it could increase pressure to evaluate fertility benefits as part of broader workforce and employee offerings for recruitment and retention strategies.
  • Employers in tight labor markets may face pressure from employees, boards, and peer companies to assess whether fertility coverage belongs alongside parental leave, childcare, adoption assistance, and other family-support benefits.
  • Employers would retain discretion over whether to offer coverage, how much to subsidize it, and the categories of services covered (including whether to cover IVF). Companies will need to weigh workforce value against premium costs, utilization risk, and whether the benefit is meaningful enough to support recruitment and retention.
  • The proposal may be especially relevant for large employers seeking a more uniform national fertility benefit across states with varying coverage requirements. Employers should also monitor whether the final rule encourages broader adoption or leads some companies to move existing fertility coverage from major medical plans into more limited stand-alone arrangements.