On May 13, 2026, the Internal Revenue Service, the Department of Labor, and the Department of Health and Human Services (collectively, the “Departments”) jointly published a proposed rule that would establish certain fertility benefits as a new category of limited excepted benefits under federal law. The proposed rule is designed to support access to fertility treatments, reduce costs, and align with executive orders promoting family formation and reducing regulatory burdens. 

While this proposed rule creates a pathway for employers to offer standalone fertility benefits, it does not go so far as to require them to participate. Thus, while these actions may serve to encourage employers to offer or expand fertility coverage, high costs and lack of comprehensive coverage will likely remain significant barriers for many Americans seeking to expand their families.

This article summarizes key aspects of the proposed rulemaking, including relevant executive action, the statutory authority invoked by the Departments, the scope of covered benefits, expected advantages for employers and workers, and key takeaways for providers and plans.

Trump Administration Executive Orders, FAQs, and Other Initiatives

The proposed rule emerges following a series of actions by the Trump Administration aimed at expanding access to fertility care. On February 18, 2025, President Trump issued Executive Order 14216, "Expanding Access to In Vitro Fertilization," which highlighted the importance of family formation and aimed to reduce out-of-pocket expenses and unnecessary regulatory burdens for fertility care, with the hope of making IVF more affordable. 

On October 16, 2025, President Trump announced that the Departments would clarify the existing categories of excepted benefits that employers can use to offer fertility benefits. The Departments contemporaneously issued FAQs, highlighting their commitment to exploring ways to leverage their existing authority to reduce costs of IVF and encourage employers to offer fulsome fertility benefits. In the FAQs, the Departments clarified existing categories of excepted benefits employers can use to offer fertility benefits, including the categories of independent, non-coordinated excepted benefits and limited excepted benefits. The Departments also announced their intention to undertake rulemaking to provide additional ways that certain fertility benefits may be offered as an excepted benefit.

The proposed rule is framed to respond to broader demographic concerns with respect to a declining fertility rate. The Departments explained that between 2014 and 2024, the number of births declined by 9 percent and the general fertility rate declined by 14 percent, from 62.9 births per 1,000 females ages 15 to 44 to 53.8. Infertility is a common problem in the United States, with recent CDC data highlighting that one in five Americans suffer from infertility. As the proposed rule explains, IVF is the most commonly used form of assisted reproductive technology (“ART”), and a single cycle is estimated to cost between $15,000 to $20,000. Historically, employer-sponsored group health plans have not covered most ART.

Source of Authority for Adding Fertility Care as an Excepted Benefit

The Departments propose to utilize their statutory authority under the Employee Retirement Income Security Act of 1974 (ERISA) and the Public Health Service  Act of 1944 (PHSA)  to recognize fertility benefits as “other similar limited excepted benefits” (similar to dental and vision benefits), if specific conditions are satisfied. 

In determining that fertility benefits are "similar" to the existing limited excepted benefits, the Departments reasoned that comprehensive fertility benefits are often excluded from major medical coverage offered by employers and are typically administered under a separate contract. Similar to adult dental and vision coverage, fertility benefits are usually not considered Essential Health Benefits (EHBs) and not covered by self-funded group health plans at all or solely to a limited extent. 

Summary of Covered Benefits

Under the proposed rule, fertility benefits would be recognized as limited excepted benefits when coverage is limited to the diagnosis, mitigation, or treatment of infertility or infertility-related reproductive health conditions and provided by medical professionals authorized to practice under applicable law. Coverage may also include medically appropriate items or services targeted to address infertility-related reproductive health conditions, to clarify that this provision includes benefits for items and services that address underlying medical causes of infertility. 

Scope of Covered Items and Services

The proposed rule is intended to provide employers with flexibility to cover a broad spectrum of treatments and interventions for fertility-related and pre-conception care. Covered benefits may  range from preventive and diagnostic care to more intensive treatments, including: diagnosis of infertility (e.g., lab tests, imaging, and diagnostic procedures); mitigation of infertility (e.g., fertility awareness-based methods, fertility education, surgical procedures, pre-conception care, and assessment of a patient's partner); and treatment of infertility (e.g., ovulation induction, IVF, and other ART procedures). Male-factor infertility treatments are also within the scope of permissible coverage. 

Excepted fertility benefits could also include fertility counselors and general education on fertility, provided that substantially all of the fertility benefits are still at the direction of a medical professional authorized to practice under applicable law. Critically, the proposed rule does not mandate any particular benefit design; employers and issuers retain broad discretion to determine which items and services within this permissible scope to cover, allowing them to tailor offerings to their workforce. 

Lifetime Dollar Limit

In addition to the limitation on scope of coverage, the Departments propose a total lifetime dollar limit of $120,000 per participant (together with their beneficiaries, if eligible). For plan years beginning after December 31, 2027, the maximum lifetime dollar amount would be increased by medical inflation. When factoring in the cost of each IVF cycle, fertility medications, diagnostic testing, genetic testing, and other procedures, participants may still regularly exceed $120,000 during their lifetime.

Additional Requirements

For a fertility benefit in the group market to qualify as a limited excepted benefit, it must either be provided under a separate policy, certificate, or contract of insurance, or otherwise not be an integral part of the plan. If self-funded, the employer must make available another group health plan that is not limited to excepted benefits and participants may decline coverage for that other group health plan. Plans and issuers must also provide written notice to participants and beneficiaries to include a description of coverage, a summary of benefits and limitations, how to identify and utilize a network provider, how to submit a claim for reimbursement, and whether the benefit utilizes the same claims procedures as the sponsor's other group health plans. The proposed applicability date is for plan years beginning on or after January 1, 2027.

Key Benefits for Employers and Workers

Benefits for Workers

Currently, many workers face significant financial barriers to fertility care. The 2022-2023 National Survey of Family Growth indicates that 40 percent of female respondents utilizing IVF reported that none of the costs were covered by their insurance, while 29 percent reported no coverage for commonly prescribed medications to improve ovulation. Under the proposed rule, a potential reduction in out-of-pocket costs could increase access and utilization for families with fertility issues who are unable to bear the full cost of treatments.

The proposed rule is intended to reduce barriers to accessing diagnostic procedures, medications, and treatments for infertility and infertility-related reproductive health conditions, allowing individuals who are attempting to conceive an opportunity to more readily assess their treatment needs. Having coverage increases the likelihood of healthcare utilization and improves health outcomes for participants and beneficiaries, and may allow them to more quickly establish a diagnosis, enabling access to more advanced treatments sooner than if care was delayed due to lack of coverage.

Notably, workers would not be required to enroll in their employer's traditional group health plan to receive excepted fertility benefits. This may be an attractive option for participants who have enrolled in group health plan coverage through another household member, such as a spouse, but would still like to take advantage of the excepted fertility benefit. The proposed rule also provides flexibility for workers seeking non-IVF fertility treatment options.

Benefits for Employers

The proposed rule posits that employers may benefit from the proposed rule in several ways. First, the rules would reduce the regulatory burden for employers seeking to offer fertility benefits because it would establish a new pathway for plan sponsors to offer fertility benefits as a limited excepted benefit that generally would not be subject to parallel market requirements under ERISA and the PHSA. 

Second, research suggests that returns on investments for fertility benefits are significant for employers. A 2023 Maven report found that workers whose employer-provided health care plans covered IVF treatment were more likely to remain in their job long-term and more likely to recommend their employer to others. There are also downstream benefits to offering fertility benefits, such as reducing potential stays in neonatal intensive care units and associated high-risk maternity-related expenses by prioritizing first-line interventions and medical policies that lead to more singleton births, fewer preterm births, and ultimately lower health care costs. 

Third, employers and plan sponsors would have significant design flexibility. The proposed rule would not require a minimum level of coverage or require employers to contribute financially and would provide a wide scope of potential benefit designs that could vary significantly in terms of covered items and services. Employers could offer benefits ranging from fertility counseling through more comprehensive coverage including IVF, tailored to their workforce. The ability to offer excepted fertility benefits may help employers attract and retain talent and support overall employee well-being. 

Fourth, because limited excepted benefits are exempt from certain ERISA Part 7 requirements, the Departments anticipate that the administrative costs of such a program would be considerably lower than those for traditional group health plans. Plan sponsors may also benefit from favorable tax treatment, as employer and employee contributions may be made with pre-tax dollars, reducing overall tax liabilities for both parties.

Compliance Considerations and Open Issues for Plan Sponsors

Plan sponsors considering whether to offer an excepted fertility benefit should be aware of several compliance requirements and unresolved issues that may be addressed in the final rule.

• Self-Funded Plan Structure: Self-funded fertility benefits must satisfy the "not an integral part of the plan" standard, which requires the sponsor to make available another group health plan that is not limited to excepted benefits and is not a Health Retirement Account or other account-based group health plan. The Departments are considering whether additional safeguards beyond this standard are necessary.  To be clear, fertility benefits can still be offered as an integral part of an existing health plan, but would do so as part of the comprehensive ERISA benefit, rather than as a limited excepted benefit (as described in this proposal).
• Premiums, Contributions, and Cost Sharing: Unlike Employee Assistance Programs, the proposed rule does not prohibit plans from charging premiums, contributions, or cost sharing for excepted fertility benefits. However, the Departments have solicited comments on whether a prohibition on employee premiums or contributions as a condition of participation should be imposed, making this a key open issue for benefit design and cost allocation.
• Lifetime Dollar Limit Uncertainty: The proposed $120,000 lifetime dollar limit remains subject to revision. The Departments have requested comment on three alternatives: a different maximum dollar amount, a maximum annual cumulative amount with carryover to subsequent plan years, or elimination of the dollar limit in favor of reliance on the scope limitation alone. Additionally, the Departments have invited comment on whether an alternative method of calculating medical inflation would more accurately reflect rising fertility treatment costs.
• HSA Interplay: Although not addressed in the proposal, for those participants covered by a high deductible health plan (HDHP) and contributing to a health savings account (HSA), offering this limited fertility benefit prior to satisfaction of the high deductible could disqualify the individual from HSA contributions.  More guidance would be welcomed.
• State Law Interplay: Fifteen states and the District of Columbia  currently require IVF coverage. Fully insured plans in these jurisdictions would likely not be able to satisfy those state requirements solely by offering fertility benefits through an excepted benefit plan. Sponsors should note, however, that some plans currently covering fertility benefits through their major medical plan could remove such coverage and offer it through an excepted benefit plan instead, potentially reducing costs by avoiding ACA market reforms and HIPAA portability requirements. Moreover, this proposed rule would not overrule state laws that prohibit coverage of IVF or state insurance laws that do not allow this type of coverage, leaving residents of those states with limited coverage options.
• Adverse Selection Risk: The Departments have flagged adverse selection as a significant uncertainty. Participants may time enrollment to coincide with plans to conceive, producing risk pools with high utilization rates that could drive up premiums and affect issuer willingness to offer coverage. Plans and issuers may take steps to mitigate these risks through enrollment and benefit design, but the Departments acknowledge that the ultimate impact on premium pricing remains unclear. Given that such a benefit also appears to be subject to COBRA, allowing terminated participants to opt-in for self-pay post-termination coverage, this could increase the adverse selection concern.
• Individual Market Extension: HHS is separately considering whether to adopt similar standards for the individual market, which would extend the excepted fertility benefit category to individual health insurance coverage under the PHSA. Sponsors and issuers operating across both markets should monitor this parallel development.

Conclusion

The proposed rule represents a significant regulatory effort to expand access to fertility care through a less burdensome pathway for employers. By creating a new category of limited excepted benefits specifically for fertility services, the Departments aim to encourage broader employer-sponsored coverage of fertility treatments, reduce financial barriers for workers, and support family formation in the United States. 

However, the proposed rule falls short of the Trump Administration’s stated goal of “ensur[ing] reliable access to IVF treatment.” For the reasons discussed herein, this rule may expand access to some amount of coverage for fertility treatments but, because it does not require coverage of fertility treatments, many Americans will be left in the same position they were in beforehand, facing tens or even hundreds of thousands of dollars of medical expenses associated with trying to grow their families. It remains to be seen whether the Trump Administration plans to take additional action to expand access to IVF with more comprehensive strategies.

Comments on the proposed rule are being accepted through the federal rulemaking process until July 13, 2026, and the rules, if finalized, would apply to group health plans and health insurance issuers offering group health insurance coverage for plan years beginning on or after January 1, 2027.

Reed Smith will continue to track developments related to fertility benefits and IVF treatment. If you have any questions about these proposed rules or any questions about reproductive health benefits, please reach out to the authors or other attorneys at Reed Smith.