Baby on Board: IRS, DOL and HHS Propose Fertility Benefit Rules

On Mother’s Day, May 10, 2026, the U.S. Departments of Health and Human Services (“HHS”), Labor (“DOL”) and Treasury (collectively, the “Departments”) issued proposed regulations to establish certain fertility benefits as limited excepted benefits under §9831(c) of the Internal Revenue Code (the “Code”), §732(c) of ERISA, and §2772(c) of the Public Health Services Act (the “PHS Act”).[1] Limited excepted benefits generally are not subject to the marketplace reforms under the Affordable Care Act, as amended, or the portability and nondiscrimination provisions of HIPAA, as amended.

Per the related News Release and as described in greater detail below, the proposed regulations provide the main requirements in order for the fertility benefit to be a limited excepted benefit are:

• Substantially all of the benefits must be for diagnosis, mitigation or treatment of infertility or related reproductive health conditions;
• Benefits are capped at a combined lifetime maximum of up to $120,000 for the participant and their beneficiaries, indexed for inflation for plan years starting after 2028; and
• The employer must provide a notice that clearly describes the coverage and meets other specified requirements (described below).

The proposed regulations are in response to Executive Order (“EO”) 14216, “Expanding Access to In Vitro Fertilization.”[2] The purposes of the EO were to ensure reliable access to in vitro fertilization (“IVF”) and provide more affordable infertility treatment options, recognizing both the medical necessity of infertility treatment for affected individuals and the broader importance of supporting American families in achieving their family formation goals. The proposed regulations also reflect FAQs about Affordable Care Act Implementation Part 72 (Oct. 16, 2025), in which the Departments expressed commitments to explore ways to leverage access to, and reduce costs for, IVF procedures.[3]

Comments, Please! Importantly, the Departments are seeking comments on the various aspects of the proposed regulations. Public comments are due by July 13, 2026.

The following are among the topics on which the Departments are seeking comments:

• Conditions for Fertility Benefits. The proposal to establish excepted fertility benefits as a new category of limited excepted benefits, the limits of the category itself, and the associated proposed conditions for such benefits to qualify as a limited excepted benefit set forth in the proposed regulations.
• Scope of Fertility Benefits. The proposals related to the scope of limited excepted fertility benefits, including the illustrative examples provided in the preamble to the proposed regulations.
• Maximum Benefits. The proposal regarding (i) whether there should be a lifetime limit or an annual limit with a possible rollover of the unused portion, (ii) what should be the initial dollar amount of the limit, (iii) how the annual adjustment to the lifetime limit is determined, and (iv) whether an alternative method of calculating medical inflation may more accurately reflect the rising costs of fertility treatment.
• Offering Traditional Group Health Coverage. The proposal requiring that traditional group health coverage must be offered, but need not be elected, in order to receive the fertility benefits.
• Premiums and Cost Sharing. Whether to prohibit any employee premium or contribution, or any cost sharing, as a condition of participation in the excepted fertility benefit, or whether plans and issuers should have the flexibility to charge premiums or contributions and impose cost sharing, as they do for limited-scope dental, vision and long-term care coverage. Brownstein Comment: We would expect that many employers would want to register their comments regarding the proposed prohibition of any employee premium or cost sharing for the fertility benefit.
• Notice. Whether the proposed approach for the participant notice is appropriate or whether there are alternative approaches that may better accomplish the same goal of informing eligible participants and beneficiaries about the availability of excepted fertility benefits and the scope of coverage provided. Also, whether any additional information elements should be required to be included in the notice.
• Application of the Rules.
  • When the regulations should go into effect.
  • How long it may take group health plan sponsors and health insurance issuers to make the necessary amendments for their existing fertility benefits coverage to qualify as limited excepted benefits or to newly offer a limited benefit for excepted fertility benefits, if so desired, and with respect to insurance coverage, for states to review and approve such filings.
  • Whether these proposed rules, if finalized, should instead be applicable upon the effective date of the final rules in order to grant group health plan sponsors and health insurance issuers flexibility to offer this new category of limited excepted benefits immediately, if desired.
  • How the proposed regulations should be applied to the individual market and whether fertility benefits should be offered on a stand-alone basis in such market.
  • Number and size of the entities (group health insurance issuers, group health plans) that would be affected by the proposed rules, the expected number of participants expected to enroll in the benefit, and the other estimates of the benefits and costs  used by the Departments as part of and in support of the regulations.
• See Sections G, H and I of Part III of the preamble to the proposed regulations for more items on which the Departments are seeking comments.

Criteria to Be a Limited Excepted Benefit

In order for fertility benefits to be a limited excepted benefit, the following criteria must be met:

• The fertility benefits are provided under a separate policy, certificate or contract of insurance or otherwise are not an integral part of the employer’s traditional group health plan.
• Coverage is limited to benefits substantially all of which are for the diagnosis, mitigation or treatment of infertility or infertility-related reproductive health conditions and substantially all of which are provided by medical professionals authorized to practice under applicable law, which may include medically appropriate items or services targeted to address such conditions.
• The total lifetime benefit per participant, together with their beneficiaries (if such beneficiaries are eligible for the fertility benefit), does not exceed $120,000 (adjusted for medical inflation for plan years after Dec. 31, 2027).
• Fertility benefits are not an integral part of a group health plan if other group health plan coverage, which is not limited to excepted benefits and not an HRA or other account-based group health plan, is made available by the same plan sponsor for the plan year to participants who are offered the fertility benefit (and their beneficiaries, if eligible for the fertility benefit), and participants (and their beneficiaries, if eligible for the fertility benefit) enrolling in the fertility benefit may decline coverage for the other group health plan coverage.
• The plan or issuer provides written notice to participants and beneficiaries about the fertility benefit coverage, provided the notice contains required information (as contained in the regulations) and is timely distributed to participants and beneficiaries.

The remainder of this memo provides more details about each of these items, as set forth in the proposed regulations.

Fertility Benefits Covered

The proposed regulations give employers great flexibility to design and offer fertility benefits for women and men that are tailored to each employer’s workforce, as long as substantially all of the excepted fertility benefits are for items or services provided at the direction of a medical professional authorized to practice under applicable law.

Excepted fertility benefits coverage include:

• Services of fertility counselors,
• General education on fertility,
• Coverage to diagnose, mitigate and treat infertility and infertility-related conditions, and
• Medically appropriate items or services targeted to address common conditions that could result in infertility and infertility-related conditions.

Examples. The proposed regulations include numerous examples of infertility conditions and potentially covered treatments, items and services.

• Examples of conditions possibly leading to infertility include:
  • Polycystic ovary syndrome, endometriosis or uterine fibroids.
  • Endocrinopathies that cause infertility including thyroid disorders, hyperprolactinemia, acromegaly, Cushing’s disease, hypogonadotropic hypogonadism, and primary ovarian disorders.
  • Varicoceles, obstruction in the vas deferens, and male hypogonadism.
• Examples of benefits related to the diagnosis of infertility include, but are not limited to:
  • Benefits for lab tests, imaging and diagnostic procedures such as laparoscopies and hysteroscopies.
  • Benefits for 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.
  • Urine tests to measure levels of luteinizing hormone for women.
• Examples of benefits to mitigate infertility include:
  • Assessment of the health and fertility of a patient’s partner (where the partner is also a participant or a beneficiary under the plan or coverage).
  • Male-factor infertility treatments.
  • An evaluation of a patient’s medical history, a physical examination, analysis of a patient’s semen and surgical approaches, including robotic surgery.
  • Ultrasound scanning, urinalysis, genetic tests, testicular biopsies and other tests to determine sperm function.
• Examples of benefits for the treatment of infertility include:
  • Ovulation induction, which includes either oral or injectable medications, which can help improve ovulation patterns or increase the number of eggs released each month.
  • Hysteroscopy and laparoscopy that can remove growths called fibroids or endometriosis tissue.
  • IVF procedures for persons where egg production is stimulated through medication and eggs are surgically retrieved from the ovaries prior to ovulation and fertilized with sperm in a laboratory environment before being transferred into the uterus.
  • IVF procedures for persons who have absent or blocked fallopian tubes, endometriosis, ovulatory dysfunction or low sperm count, among other conditions.
  • Pre-conception care.

Excepted fertility benefits may include benefits that typically are covered under a major medical plan. In addition, fertility benefits could be offered simultaneously under a major medical plan and a limited excepted benefit plan—the benefits could overlap or be coordinated.

Brownstein Comment: The Departments recognize that the causes of infertility and infertility-related conditions may vary by individual based on their overall health, specific health conditions, age, and environmental and socioeconomic factors. An example offered is that maintaining a healthy weight and eating a healthy diet can help men and women address infertility. Does that mean that an excepted fertility benefit plan could be coverage of GLP-1 weight loss drugs?

The Departments seek comments on the proposed regulations related to the scope of limited excepted fertility benefits, including the illustrative examples provided in the preamble to the proposed regulations.

Lifetime Dollar Amount

In order to constitute the type of ancillary benefit contemplated within the meaning of “similar, limited benefits” under the excepted benefit provisions of Code §9832(c)(2)(C), ERISA §733(c)(2)(C), and PHS Act §2791(c)(2)(C), the Departments propose that there be a maximum lifetime limit on the excepted fertility benefits. As proposed, the total lifetime benefit per participant, together with the participant’s beneficiaries (if such beneficiaries are eligible for the excepted fertility benefit), would not exceed $120,000 for plan years beginning after Dec. 31, 2027.

It also is proposed that this lifetime amount would be indexed annually for medical inflation by applying a methodology similar to that used for the grandfathered plan regulations. The adjustment would be determined by multiplying $120,000 by the difference between the overall medical care component of the CPI–U (unadjusted) published by the DOL for December of the previous plan year and 587.144 (the overall medical care component of the CPI-U (unadjusted) for December 2025), divided by 587.144.

The Departments seek comments on the proposed regulations regarding (i) whether there should be a lifetime limit or an annual limit with a possible rollover of the unused portion, (ii) what should be the initial dollar amount of the limit, (iii) how the annual adjustment to the lifetime limit is determined and (iv) whether an alternative method of calculating medical inflation may more accurately reflect the rising costs of fertility treatment.

Fertility Benefits Must Not Be an Integral Part of Employer’s Group Health Plan

To be a limited excepted benefit, the fertility benefits either (i) must be provided under a separate policy, certificate or contract of insurance or (2) otherwise must not be an integral part of the employer’s traditional group health plan.

In order for a fertility benefit to be considered not an integral part of the employer’s traditional group health plan, the proposed regulations require that the plan sponsor must offer a traditional group health plan, which is not an HRA or other account-based group health plan, to all individuals who are offered the fertility benefit. However, participants in the fertility benefit (and their beneficiaries, if eligible for the fertility benefit) would not be required to enroll in that traditional group health plan in order for the fertility benefit to qualify as a limited excepted benefit or to receive that fertility benefit.

No Premium or Cost Sharing. The proposed regulations prohibit an employer from charging premiums or contributions or imposing any cost sharing as a condition of participation in the excepted fertility benefit.

The Departments seek comments on whether an additional safeguard that no employee premium or contribution be required as a condition of participation in the excepted fertility benefit should be imposed, or whether plans and issuers should have the flexibility to charge premiums or contributions and impose cost sharing, as they do for limited-scope dental, vision and long-term care coverage.

Notice Requirements

The proposed regulations require that plans and issuers provide written notice to plan participants and their beneficiaries about the availability of excepted fertility benefits and the specific benefits covered. The notice could be electronic. The notice would be required to be sent to each participant’s last known address and, if different, to each of the participant’s beneficiaries’ last known address.

The preamble comments that summary plan descriptions (“SPDs”) often contain too much detail. Rather, the proposed notice requirement would be met with a shorter, more “reader-friendly” format, more like a “quick reference guide.” However, the preamble to the proposed regulations state that the Departments intend for the proposed notice to be an important educational tool that would help participants and beneficiaries navigate their excepted fertility benefits. Brownstein Comment: The desire that the notice serves as a quick reference guide seems to contradict the intent that the notice be an educational tool.

Contents of the Notice. The required notice would be expected to include the following information:

• A description of the fertility benefits coverage.
• A summary of fertility benefits.
• Any limitations of the fertility benefits coverage, including the lifetime dollar limit established by the plan or issuer that complies with the maximum lifetime dollar limit.
• Information on how to identify and utilize a network provider, if applicable.
• How to submit a claim for reimbursement.
  • Whether the claim could be made on paper or electronically.
  • Required information needed for the plan.
  • Description of documentation that must be submitted for the claim to be processed.
• Accurate information on whether the benefit utilizes the same claims procedure as used for the sponsor’s other group health plans.

As with other participant notices, the proposed regulations would require that this notice must be written in a manner calculated to be understood by the average plan participant of the specific employer, taking into account the level of comprehension and education level of the specific employer’s employees and the complexity of the coverage. Among other requirements, use of technical jargon and complex medical terminology should be limited or eliminated, except where necessary. Long, complex sentences should not be used. Plain English (that is, at or below 8th grade reading level) should be used. The information should not have the effect of misleading, misinforming, confusing or failing to inform participants or beneficiaries.

Timing of Notice. The notice must be provided to a participant no later than the first day on which the participant is eligible to enroll, and then annually. The notice also must be provided on request.

Brownstein Comment: As stated earlier, the Departments are seeking comments on a wide range of topics related to fertility benefits. We expect that the third-party service providers of fertility benefits will take an active role in commenting on these proposed regulations. We hope that individual employers and groups representing employers will provide their comments, which will aid the Departments to craft final regulations that will be useful and nonburdensome on employers so as to encourage employers to implement limited excepted fertility benefits.

Brownstein Comment: There are many aspects and complications to having a child. An employer may want to consider what other benefits could be offered along the timeline continuum of their employees’ childbearing [BHFS1] and child-rearing responsibilities. Offering limited excepted fertility benefits to employees is just one part of the support needed by employees who are starting or expanding their families. Among other things, employers that are considering implementing a limited excepted fertility benefits program also should consider:

• Reviewing their paid and unpaid leave policies to determine whether employees are provided with adequate time off for having a baby and bonding with it;
• Implementing dependent care spending accounts under the employer’s cafeteria plan so employees can purchase childcare on a pre-tax basis; and
• What might be needed to retain and maintain morale of employees who do not have or want children, who have older children or who want to adopt or foster.

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This document is intended to provide you with general information regarding employee benefits issues. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to issues, please contact the attorneys listed or listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed. This communication may be considered advertising in some jurisdictions.

¹ 91 Fed. Reg. 27140 (May 13, 2026).

² 90 Fed. Reg. 10451 (Feb. 18, 2025).

³ FAQs about Affordable Care Act Implementation Part 72 (Oct. 16, 2025), found at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-72 and https://www.cms.gov/files/document/faqs-part-72.pdf.