A cross-agency regulatory proposal seeks to add fertility benefits as a category of “excepted” benefits exempt from certain insurance requirements under federal law.
The proposal would amend regulations implementing the Employee Retirement Income Security Act of 1974, the Internal Revenue Code, and the Public Health Service Act to expand access to fertility treatments and services.
Under the proposed rules, employers would be permitted to establish standalone fertility benefit plans rather than integrating fertility coverage into their major medical plans.
Services such as in-vitro fertilization could be covered under these standalone plans, giving employers greater flexibility in how they structure reproductive health benefits for workers.
Participation in such plans would be entirely voluntary, meaning no employer would be required to offer a fertility benefit plan under the proposed rules.
Employees would also not be required to enrol in a group health plan in order to access fertility benefits, as the proposed rules allow the plans to operate on a standalone basis.
Employers may charge participants premiums and impose cost-sharing arrangements, in a structure similar to how standalone dental and vision coverage currently operates.
The maximum lifetime benefit per participant under the proposed rules would be set at $120,000, indexed for medical inflation for plan years beginning after December 31, 2027.
A key unresolved issue concerns tax treatment, as the proposed rules do not change the position under Internal Revenue Code Sections 105, 106, and 213(d) regarding which participants can receive benefits on a tax-free basis.
Benefits for participants without a diagnosis of medical infertility, including same-sex couples and individuals seeking to have children on their own, cannot be provided on a tax-free basis under the current tax framework.
If finalised, the rules would take effect for plan years beginning on or after January 1, 2027, representing a significant shift in how fertility care can be packaged as an employee benefit.
The public comment period for the proposed rules closes on July 13, 2026, giving employers, insurers, and advocacy groups a limited window to submit their responses to regulators.