The Departments of Labor (DOL), Health and Human Services, and the Treasury released proposed regulations that would create a new category of limited excepted benefits specifically for fertility benefits. The proposal would give employer plan sponsors greater flexibility in offering these benefits to their employees.
Excepted benefits are exempt from certain group health plan mandates. Under the proposal, fertility benefits would qualify as an excepted benefit if:
- Substantially all of the benefits are for the diagnosis, mitigation or treatment of infertility or related reproductive health conditions
- Benefits are capped at a combined lifetime maximum of up to $120,000 (as indexed) for the participant and their beneficiaries
- Participants and beneficiaries are provided a notice that describes the coverage
The DOL website has additional information about excepted fertility benefits, along with a fact sheet on the proposed rule.
Background
Executive Order: Expanding Access to In Vitro Fertilization
In February 2025, President Trump issued an executive order directing the assistant to the president for the Domestic Policy Council to submit policy recommendations to protect in vitro fertilization (IVF) access and aggressively reduce out-of-pocket and health plan costs for IVF treatment. Part of the resulting policy recommendations included issuing regulations or guidance that would allow employers to expand access to coverage for fertility through the provision of an excepted benefit.
FAQs Part 72
In October 2025, the Departments issued Affordable Care Act (ACA) FAQs Part 72 covering when fertility benefits such as IVF would constitute an “excepted benefit” exempt from various group health plan mandates in the Internal Revenue Code (IRC), ERISA and the Public Health Service Act (PHSA). The FAQs clarified the existing categories of excepted benefits — including independent, non-coordinated excepted benefits and limited excepted benefits — that employers could use to offer fertility benefits. For more information on this guidance, see Departments issue FAQs on fertility benefits.
Excepted benefits
Below are the four categories of excepted benefits described in the PHSA, ERISA and IRC, along with examples:
- Benefits excepted in all circumstances: Onsite clinics, automobile insurance, liability insurance, workers compensation, and accidental death and dismemberment coverage
- Limited excepted benefits: Limited scope vision or dental benefits; certain healthcare flexible spending accounts; and benefits for long-term care, nursing home care, home healthcare or community-based care
- Non-coordinated excepted benefits: Specified disease or illness coverage (e.g., cancer and critical illness policies) and hospital indemnity or other fixed indemnity insurance (e.g., accident indemnity insurance)
- Supplemental excepted benefits: Coverage supplemental to Medicare, to the Civilian Health and Medical Program of the Department of Veterans Affairs, or to Tricare, or similar coverage that is supplemental to coverage provided under a group health plan, provided under a separate policy, certificate or contract of insurance
Excepted fertility benefits
Under the proposal, fertility benefits will qualify as excepted benefits under the limited excepted benefit category if they meet the following four requirements (described below in more detail):
- Coverage must be limited to fertility benefits
- Benefits cannot exceed the applicable lifetime dollar limit
- The fertility benefits cannot be an integral part of the plan
- Participants and beneficiaries must be provided a written notice that describes the coverage
Benefits covered
Coverage must be limited to benefits substantially for the diagnosis, mitigation or treatment of infertility or infertility-related reproductive health conditions and substantially provided by medical professionals legally authorized to practice medicine. It can include medically appropriate items or services targeted to address infertility.
Examples of benefits for infertility diagnosis include benefits for lab tests, imaging, and diagnostic procedures such as laparoscopies and hysteroscopies. Such benefits may also include evaluation with hysteroscopy or laparoscopy for patients with a history of endometriosis, pelvic infections or ectopic pregnancy; blood tests to measure hormones for both men and women; semen analyses to assess the quality and health of the sperm for men; and urine tests to measure levels of luteinizing hormone for women.
Lifetime dollar limit
The total lifetime benefit per participant, together with their beneficiaries who are eligible for the fertility benefit, cannot exceed $120,000 (as indexed for plan years beginning after December 31, 2027). According to the Departments, this limit is in line with the cost many individuals pay for fertility treatment, as well as the lifetime maximum benefits of several state insurance laws. Note: As an excepted benefit, the fertility benefits would not be subject to the ACA’s restriction on lifetime dollar limits for essential health benefits. An employer would also be permitted to set a lower limit.
As an excepted benefit, the fertility benefits would not be subject to the ACA’s restriction on lifetime dollar limits for essential health benefits.
Not an integral part of the plan
To be a limited excepted benefit, the fertility benefits must: 1) be provided under a separate policy, certificate or contract of insurance; or 2) not be an integral part of the plan. The first condition would apply only to fully insured group health plans, but the second condition can apply to both fully insured and self-insured group health plans.
Additionally, other group health plan coverage that is not limited to excepted benefits and that is not a health reimbursement arrangement or other account-based group health plan must be made available by the same plan sponsor for the plan year to participants who are offered the fertility benefit (and to eligible beneficiaries). Only individuals eligible to participate in the traditional group health plan would be eligible to participate in the excepted fertility benefit. While plan sponsors would be required to offer a traditional group health plan to all individuals offered the fertility benefit, participants in the fertility benefit (and eligible beneficiaries) would not be required to enroll in that traditional group health plan for the fertility benefit to qualify as an excepted benefit.
Notice
The required notice must be written in a way that can be understood by the average plan participant and describe the coverage by including:
- A summary of benefits and limitations of the coverage (including the lifetime dollar limit established by the plan that complies with the lifetime dollar limit in the proposed regulations)
- Information on how to identify and utilize a network provider, if applicable
- Information on how to submit a claim for reimbursement, including whether the benefit utilizes the same claims procedure as for the employer plan sponsor’s group health plans
This notice must be provided no later than the first date on which the participant or beneficiary is eligible to enroll in the fertility benefit coverage, and then annually, as well as upon the participant’s or beneficiary’s request. A single notice may be provided to a participant and any beneficiaries residing at the participant’s last known address. However, if a beneficiary’s last known address is different from the participant’s address, a separate notice must be provided to the beneficiary at their last known address.
Excepted benefits and compliance
Excepted benefits providing medical care are generally considered group health plans under ERISA. Employer plan sponsors must ensure they are complying with ERISA’s group health plan requirements unless an exception applies.
An excepted benefit is not automatically exempt from complying with ERISA. ERISA requires covered plans to maintain official plan documents and summary plan descriptions and to file a Form 5500 (annual report), among other things. Laws that are incorporated into ERISA, such as COBRA (continuation of group health plan coverage), ACA, and the Mental Health Parity and Addiction Equity Act, may also apply. For additional information on how ERISA applies to excepted benefits, see Is an ‘excepted benefit’ subject to ERISA?
Going forward
The excepted fertility benefit category 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. The Departments are seeking comments on the proposed applicability date to help determine the amount of time group health plan sponsors may need to amend their existing fertility benefits coverage to qualify as limited excepted benefits or to begin offering a new limited benefit for excepted fertility benefits.
The Departments are also seeking comments on whether the proposed rule, if finalized, should instead apply as of the final rule’s effective date in order to give plan sponsors and health insurance issuers the option to offer this new category of limited excepted benefits immediately. The lifetime dollar limit on fertility benefits would be indexed for inflation for plan years starting on or after January 1, 2028.